Hansard, 2006-02-27

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2006) To (2006) Mr S Iswaran 19 Feb 23 Feb 01 Mar 03 Mar 08 Mar 09 Mar 22 Mar 23 Mar Mr George Yong-Boon Yeo 25 Feb 25 Feb Mr Cedric Foo Chee Keng 27 Feb 03 Mar Mr R Ravindran 27 Feb 28 Feb Dr Tan Sze Wee 27 Feb 01 Mar Dr Loo Choon Yong 28 Feb 28 Feb Dr Michael Lim Chun Leng 08 Mar 16 Mar Mr Wong Kan Seng 12 Mar 17 Mar Dr Geh Min 28 Apr 14 May

ABDULLAH TARMUGI Speaker Parliament of Singapore

Order. On behalf of the House, I would like to place on record the death of Mr S Rajaratnam, former Senior Minister, on 22nd February 2006.

Mr S Rajaratnam was elected as a Member of the 1st Legislative Assembly for Kampong Glam in May 1959, and remained in that seat until his retirement in 1988. During this 29-year period, Mr Rajaratnam served the nation in various capacities in the Cabinet, first as Minister for Culture and later as Minister for Foreign Affairs for 15 years, from 1965 to 1980. He was also concurrently the Minister for Labour from 1968 to 1971. Mr Rajaratnam was appointed Second Deputy Prime Minister (Foreign Affairs) in 1980 and went on to become Senior Minister from 1985 until his retirement from politics.

Mr Rajaratnam will be remembered as a person of great intellect and eloquence, yet humble and in touch with the common man. He made significant contributions to this House and to Singapore.

I desire, on behalf of this House, to express our deep sense of loss at the sad passing of Mr S Rajaratnam. I wish to join all Members in expressing our deep sympathy and condolence to the family of the late Mr S Rajaratnam.

As a mark of respect to the late Mr S Rajaratnam, I propose that the House observe a one-minute silence. Will Members please rise?

The House rose and paid respect.

1. Mr Steve Chia Kiah Hong asked the Minister for Trade and Industry (a) if the lagoons at Sentosa are safe for swimming; and (b) if so, why do they have the highest record of six drownings in the same location in the last 13 months.

Mr Speaker, Sir, Sentosa Development Corporation takes the safety of beach-goers very seriously. SDC has a team of trained and certified lifeguards manning the beaches from 9 am to 7 pm daily. More lifeguards are also deployed during peak periods to cope with the increased crowds. For example, Sentosa currently has six towers and one high chair for the entire three-kilometre beach. This density is twice that of the Gold Coast, where there is only one tower per kilometre of beach. Also, SDC undertakes regular works to maintain the sand gradient along the beaches so that the waters are safer to swim in.

Of the five drowning incidents last year and the most recent incident in January on Sentosa, two of the victims were suspected to have consumed alcohol. In all these incidents, the victim strayed outside the roped-in areas designated for swimming. These roped-in areas are marked by a string of floats and two flags on the beach, and are closely supervised by lifeguards.

SDC deeply regrets the loss of lives in the drowning incidents. SDC has stepped up its efforts to raise public awareness of beach and water safety. In March 2005, SDC launched a campaign using posters and brochures to educate beach-goers of safety guidelines. Lifeguards also share water safety tips with beach-goers during their regular patrols.

SDC's efforts alone will not be enough. To improve beach safety, the public has to play its part too and take precautions for their personal safety. Sentosa's beaches are not enclosed lagoons but part of the open sea. In this environment, swimmers will be exposed to the natural tidal, wave and wind conditions, as well as to marine creatures. This is not peculiar to Sentosa. Hence,

I wish to reassure Members that SDC will continue to monitor the situation and review the current beach safety measures to ensure that Sentosa's beaches remain safe to beach-goers.

beach-goers at Sentosa are strongly advised to exercise the same level of caution as they would in the open sea.

Sir, the Minister has actually not answered my question on whether it is safe for swimming, because if it is safe for swimming, there would not have been so many drownings in such a short time. Experts have said - it was reported in the newspapers - that the gradient and the coral reef actually sink in at the roped in area, and it becomes a danger zone for the beach-goers. Parents of young boys know that it is not a safe place for swimming.

What is your question, Mr Chia?

Is it actually safe for swimming? The Ministry should do a thorough research into the gradient of the lagoons to ensure that it is safe for swimming.

Mr Speaker, as I mentioned in my reply just now, the Sentosa Development Corporation regularly reviews the beach gradient to make sure that it remains safe for beach-goers to go to. The lagoons are part of the open sea and are subject to the various tidal wave conditions. So, when people swim at the Sentosa beaches, they must realise that they are actually swimming in the open sea.

In Singapore, there is an average of 40-50 drowning incidents along our coastline. Sentosa beaches are part of this coastline. Beach-goers should take all precautions when they are swimming in the open sea.

2. Prof. Ivan Png Paak Liang asked the Minister for Information, Communications and the Arts if he will consider adopting, as an action item for the Asia-Pacific Economic Cooperation (APEC) and the International Telecommunications Union, a common emergency telephone number throughout APEC and the world respectively.

Mr Speaker, Sir, the development of emergency telephone numbers has not been internationally coordinated. Historically, the International Telecommunications Union (ITU), which is the United Nations specialised agency for telecommunications, left the assignment of emergency numbers to national administrations. As a result, each country decides on its emergency number to facilitate public access to emergency services. For example, the European Union has adopted "112" as its emergency number, while the USA and Canada have "911". Closer to home, Indonesia is using "112", the Philippines "911" while Malaysia has adopted "999". Singapore has adopted "999" as our emergency service number.

In 1998, with the growth of mobile technology, a public-private sector initiative, comprising standards organisations and mobile phone companies from all over the world formed the 3rd Generation Partnership Project (3GPP). The aim was to cooperate for the production of a complete set of globally applicable technical specifications for the

Singapore is a member of the 3GPP consortium. Today, our mobile networks support both the "112" and the "911" international emergency number. This means that foreign travellers in Singapore with roaming hand phone facilities can dial either the "112" or "911" emergency numbers to reach an Emergency Call Centre in Singapore.

In the longer term, a single global emergency number is desirable. Hence, the ITU is now studying the feasibility of a single global emergency number based on an initiative proposed by Jamaica last year. Jamaica had proposed the adoption of a three-digit non-geographic number "112" as the global emergency number to be dialled anywhere in the world, in fixed, mobile and nomadic access modes to reach the local fire, police, medical and ambulance and coastguard emergency services. It also proposes that ITU establish a working group to study and recommend solutions for the development of a global emergency access system, including the adoption of the global emergency number.

Jamaica's proposal will be discussed when the ITU Study Group meets in May this year. Amongst the many issues that need to be addressed include the choice and format of the proposed emergency number. Today, countries that have configured their national numbering and

Singapore will certainly consider participating in the deliberations of the ITU Study Group in May this year. We hope to contribute to the effort to build international consensus on a common emergency number.

3rd Generation Mobile systems. One of the technical specifications that came out of this initiative was the use of "112" as an international emergency number for GSM mobile phone networks. This means that GSM mobile phone users who make calls to "112" will have their calls redirected to the local emergency telephone number, if one exists in the country they are in. This is valuable for foreign travellers, who may not know the local emergency number. dialling plans and technical networks around their own emergency number may not be prepared to align to an international standard number if it is different from theirs. Some countries are also constrained by the availability of numbers, which are a scarce national resource and need to be managed judiciously. Operators will need to consider the technical and commercial implications of changing numbers. Regulators must consider appropriate public awareness campaigns to educate the citizenry on the changes and to enforce the change worldwide. Realistically, we cannot expect a swift international consensus on the matter given the wide impact on the global community.

Sir, I thank the Hon. Minister for the comprehensive reply. I have two supplementary questions. We are a country which is very open. We are trying to promote tourism. We are very open to international trade and investments. We have very many foreign visitors, both vacationers and businessmen. First, can Singapore take the lead in implementing the "112"? There is no need to wait for the rest of the world to catch up. Let us implement it first for all our fixed-line calls and non-GSM mobile. It is just a matter of call forwarding. It should not be that difficult. So, can we take the lead in this and we will actually get the most benefits as an open country?

Second, can we do our utmost in the international forum, not just wait for ITU? We can press this in ASEAN, APEC and many other forums where we can move

this forward, and then bring this to fruition. As an open economy which depends on trade, investments and tourism, we stand to benefit the most. We should take the lead here.

Sir, we support an international emergency number. We will certainly work in international fora to try and adopt one single number for the whole world.

With regard to the Member's first suggestion, we will look into it.

3. Prof. Ivan Png Paak Liang asked the Minister for Information, Communications and the Arts whether Government Ministries and agencies will make services available on alternative Internet browsers, in view of the relative insecurity of Internet Explorer.

Mr Speaker, Sir, Prof. Png asked whether Government online services could be made available on Internet browsers other than Microsoft Internet Explorer.

There are more than 1,600 Government e-services online today, which were developed over the last six years. To ensure that these e-services are accessible by users using alternative browsers, the Government Ministries and agencies have, as far as possible, avoided using browser-specific features in the development of their e-services. As a result, the majority of these services are accessible on a range of browsers.

However, it would neither be feasible nor cost-effective to mandate that all these 1,600 e-services inter-operate with all alternative browsers given the wide

We have noted an increase in the percentage of Internet users using alternative browsers. We will continue to monitor this trend and ensure that Government e-services continue to be accessible by the vast majority of our users.

range of choices available. Instead, the Government Ministries and agencies strive to ensure that e-services can be delivered to as wide a population as possible, by making sure that they work well with the most commonly used browser. Since 2002, Microsoft Internet Explorer has been and still is the most popular browser with more than two-thirds of the global market share.

Sir, would the Hon. Minister please consider coordinating with the regulatory agencies, such as MAS, to persuade our banking and financial institutions to offer their services on browsers other than Internet Explorer? As the Hon. Minister has just observed, one-third of the users are not using Internet Explorer. I would like to stress that Internet Explorer has been documented to be a much less secure browser than other alternatives. So it behoves us in the interest of our population to encourage our banking, healthcare and other sectors where security is important, to make their services available on something other than Microsoft Internet Explorer.

The world of browsers is a dynamic world. The companies that develop browsers are constantly updating their browser systems. So it is a question of keeping up with the changes in the industry. At the same time, we encourage our Government services as well as the private sector to offer their e-services on as many browsers as possible. The situation is not too bad. Currently, the commonest browser is Internet Explorer with about 66% of the market. The next

If we take Firefox and test it with the various Government agencies, it works on ACRA, CPF, HDB, IRAS, LTA, MINDEF, MOF, MOM, NLB, ROM and URA services. We have not done an extensive test on all the possible e-services available. But the vast majority of e-services can be accessed by Firefox. We will continue to encourage all providers of e-services to keep up with the changes in the Internet world.

most commonly used browser is Firefox which has 25% of users, and Mozilla is 3.1%. The other browsers combined is about 2%.

4. Assoc. Prof. Ong Soh Khim asked the Senior Minister (a) what is the number of personal loans and credit facilities in the market that have a minimum annual income requirement of between $18,000 and $30,000, such as ezyCash; (b) how many of these personal loans and credit facilities are governed by the Banking Act; and (c) in the last two years, how many cases of bankruptcy have resulted from borrowers of such facilities being unable to pay their loans.

Mr Speaker, Sir, financial institutions regulated by the MAS can only grant unsecured credit facilities to individuals earning a minimum annual income of $30,000. However, apart from these regulated financial institutions, moneylenders also grant loans. They are either licensed or granted exemptions under the Moneylenders Act. While moneylenders are not required by law or regulation to grant loans only to borrowers who have a certain minimum income, they will assess the borrower's credit worthiness before deciding whether

Assoc. Prof. Ong has also asked about the number of personal loans and credit facilities in the market that have a minimum annual income requirement of between $18,000 and $30,000. The Government does not have data on the income limits that each moneylender subjects its borrowers to.

As I mentioned, moneylenders are not required by law to impose minimum income requirements, unlike financial institutions regulated by the MAS. The Government places the focus of its rules on financial institutions as these are the largest lenders, unlike moneylenders which are generally small operations granting small value loans. Nonetheless, with the emergence of larger moneylenders like GE Money, the Government is looking into establishing a consistent regulatory regime for personal loans granted by financial institutions and moneylenders.

Assoc. Prof. Ong also asked about the number of bankruptcy cases that were due to the inability to repay loans. In the last two years, about 2,000 to 3,000 people across all income groups - closer to 2,000 - were adjudged to be bankrupts each year for reasons to do with excessive use of credit.

to grant a loan and what the loan amount should be. Some of these moneylenders only lend to borrowers with a certain minimum income. For example, GE Money which provides the ezyCash facility that Assoc. Prof. Ong Soh Khim refers to requires its borrowers to have a minimum income of $19,200 per annum.

5. Assoc. Prof. Ong Soh Khim asked the Minister for the Environment and Water Resources whether Singapore has

any plans (i) for a directive on Waste Electrical and Electronic Equipment (WEEE) similar to that of the European Parliament Direction 2002/96/EC on WEEE; (ii) to prevent WEEE, promote the reuse, recycling and other forms of recovery of such waste so as to reduce disposal; and (iii) to improve the environmental performance of all operators involved in the life-cycle of electrical and electronic equipment.

Sir, the European Community's Directive 2002/96/EC requires EU member countries to introduce laws in their respective countries by 13th August 2004 which mandate that producers of electrical and electronic equipment must collect, reuse, recycle and dispose of such equipment when it goes into the waste stream. Under the Directive, EU member countries require producers of electrical and electronic equipment to put in place measures for the separate collection of waste electrical and electronic equipment (WEEE) by 13th August 2005 at their own cost. The Directive also sets a target of collecting, on average, at least 4 kg per person per year of WEEE from households by 31st December 2006. Many EU countries have not been able to meet the deadlines set in the Directive. Measures for the separate collection of WEEE have not been implemented in some EU countries. A few have yet to introduce legislation to implement the Directive. Singapore should, therefore, Sir, follow these developments very closely and evaluate the effectiveness of introducing a similar Directive prematurely.

There is no problem with the disposal of WEEE in Singapore currently. Why? Because most used electrical and

My Ministry will monitor the situation and study the practices in other countries of recycling WEEE. The National Environment Agency (NEA) will also continue to work with producers and importers of electrical and electronic equipment to raise awareness and share best practices of WEEE management.

electronic equipment in Singapore are sold to second-hand goods traders or what we call the karang guni men or women, while some are donated to charitable organisations, which is increasingly the case. In addition, companies such as Hewlett Packard, Canon, Dell and Nokia have put in place schemes to take back used electrical and electronic equipment from their customers for recycling. Why? Because they are valuable products. The equipment collected are either refurbished for reuse or sent to recycling facilities locally or overseas. As a result, there is hardly any electrical and electronic equipment found in the waste disposed of at the four incineration plants and Semakau landfill in Singapore.

6. Mr Steve Chia Kiah Hong asked the Minister for Education if the Ministry has been giving out scholarships to students from China for any other purpose or for other courses of study, besides the teaching scholarships for Chinese teachers.

Sir, the Ministry of Education used to offer teaching scholarships to students from China for the purpose of recruiting Chinese Language teachers. However, from 2002, the scheme was discontinued as the PRC's National Office for Teaching Chinese as a Foreign Language (Hanban) has been providing MOE with good quality PRC graduates to teach in our schools. MOE does not

currently offer any scholarships to students from China. We support the efforts of our universities and the corporate sector to do so, as part of Singapore's efforts to build up its talent pool.

Sir, in the case of a newspaper report of a China student, Zhang Wei, who was offered by MOE to come to Singapore to study computer science and then he subsequently failed and hanged around in the campus - to cut the story short - why was he offered a scholarship by MOE to study computer science in Singapore, since there is no scholarship given?

The scholarships are probably offered by one of our Government-linked companies (GLCs). We do have some Government-linked companies that offer scholarships to PRC students.

Clarification, Sir. The newspaper carried a report that the China student, Zhang Wei, was offered a MOE scholarship, not a GLC scholarship.

I did not know the Member wanted to ask specifically about the Zhang Wei's case. We can check on it. But our understanding is that the scholarship could not have come from the Ministry of Education. As I have said, the Ministry of Education's role in this scholarship is a supportive one. For example, we work with the Ministry of Education in the PRC to effect the agreement. Our education secretary in our embassy in Beijing liaises with the universities and the Ministries to link up the selection panel from the GLCs as well as the institutions.

Sir, I thank the Minister of State for clarifying that the

MOE did not give out any scholarship for any student other than to Singaporeans.

7. Prof. Ivan Png Paak Liang asked the Minister for Health whether Government Ministries and agencies will use less carpets in their buildings as carpets may be less healthy than other materials such as linoleum in our tropical climate.

Mr Speaker, Sir, Prof. Png asked if my Ministry would discourage the use of carpets in public buildings. Mr Speaker, Sir, if we do, you will have problem extending red carpet treatment to your counterparts.

Presumably, Prof. Png thinks that carpets are unhealthy materials which may be sources of chemical or biological agents, resulting in human allergies or irritations or other ill-health effects. But to-date, studies have not found any conclusive proof to implicate the use of carpets as a source of ill-health. After all, carpets are made of the same materials you find in most clothing. They are commonly found indoors and they have been in use for many years. The main issue is proper maintenance. As with all furnishings and fixtures, regular and proper cleaning of the carpets is essential for good hygiene.

As there is no evidence to implicate carpets as a health hazard, my Ministry has no ground to issue any health advisory against their use. Whether carpets or other materials should be used in a particular building will therefore depend on other factors, such as cost and aesthetics.

May I ask the Hon. Minister if Singapore has done a

Secondly, may I ask the Minister whether he would pay particular attention to the use of carpeting in hospitals. I notice on my most recent visit to a Government hospital that linoleum is now being replaced by carpeting. I am wondering whether that is customer service really, or they have considered the impact on health.

study of the use of carpets in our tropical climate or is the Ministry relying on studies done in temperate countries where the climate and environmental conditions may be different, and the hazards may be different?

Sir, the experts in Ministry of Health assured me that there have been local studies periodically done indeed by NUS as well as the former Environment Ministry. The current Environment Minister may have an interest in this area too. As for hospitals, in fact, this is an interesting subject. Many years ago, when I was new to hospital administration, I made it a point to visit many hospitals. I must have visited about 100 hospitals all over the place and was struck by the extensive use of carpets in US, for example. I got to meet many people, not just doctors, nurses, microbiologists, infection control people, but also housekeepers and people who have a special interest in this area. And I got to learn a lot about this subject.

Two things struck me. First, the floor maintenance of hospitals - because hospital is such an unhealthy place - is a science by itself, it is a specialised subject, and you need intensive knowledge and study into this area, coupled with scientific studies and research. In the US, for example, there are firms who specialise in hospital maintenance and nothing else. After extensive discussions with them, I decided on two things at that point in time: one, how little we know about other things - that in hospital administration, it

Secondly, we need to upgrade our standard of maintenance of hospitals in Singapore. So I persuaded the specialist firms in US to explore Southeast Asian market, including Singapore. And I am glad that at least one of them decided to come to Singapore and after many years, they are still around. I think along the way, hospital maintenance today is quite different from 20 years ago. So I think we have made some contribution in this area.

is not just doctoring and nursing care but there are a lot of non-clinical areas where expertise is needed. That was when I decided firmly that we should outsource non-clinical activities to specialists. When I became the CEO for NUH, we were the first hospital that outsourced non-clinical activities, including hospital maintenance.

"to provide for making supplementary provision to meet additional expenditure for the financial year 1st April 2005 to 31st March 2006 (both dates inclusive)",

recommendation of President signified; presented by the Second Minister for Finance (Mr Raymond Lim Siang Keat); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2005/2006, and to be printed.

"to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April 2006 to 31st March 2007 (both dates inclusive)",

recommendation of President signified; presented by Mr Raymond Lim Siang Keat; read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of

Expenditure for FY 2005/2006, and to be printed.

"to amend the Private Lotteries Act (Chapter 250 of the 1985 Revised Edition) and to make related amendments to the Betting and Sweepstake Duties Act (Chapter 22 of the 1999 Revised Edition) and the Inland Revenue Authority of Singapore Act (Chapter 138A of the 1993 Revised Edition",

recommendation of President signified; presented by Mr Raymond Lim Siang Keat; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to establish a National Research Fund and to provide for its proper administration, and to make consequential amendments to the Agency for Science, Technology and Research Act (Chapter 5A of the 2002 Revised Edition) and the Standards, Productivity and Innovation Board Act (Chapter 303A of the 2002 Revised Edition)",

presented by Mr Raymond Lim Siang Keat; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Electricity Act (Chapter 89A of the 2002 Revised Edition)",

presented by the Minister for Trade and Industry (Mr Lim Hng Kiang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order read for resumption of Debate on Question (17th February, 2006),

"That Parliament approves the financial policy of the Government for the financial year

Question again proposed.

1st April, 2006 to 31st March, 2007." - [Prime Minister and Minister for Finance].

Mr Speaker, Sir, allow me to first congratulate the Prime Minister and Finance Minister, Mr Lee Hsien Loong, for presenting a Budget hailed as generous, compassionate and inclusive for all Singaporeans. "$2.6 billion help package for all" was the headline of the Straits Times on Saturday, 18th February, in addition to having a special "Progress Report" segment. The Business Times captioned its publication with "Rewarding work, promoting growth", but acknowledged it was less generous for corporate Singapore in its editorial. The Today paper flashed "Windfall for all", while Berita Harian dubbed it as "Belanjawan 'murah hati'". Similarly, the Lianhe Zaobao impressed with "Zhen Zhang Pei Tao; Yu Suan An - Er Shi Liu Yi Yuan Quan Min Fen Hong".

It is indeed a Budget aimed at balancing between sharing the fruits of success with Singaporeans while also recognising that growth stimulants are needed for the longer term health of the economy to keep ourselves in tandem with the rapid changes of globalisation.

Generous as the Budget may be for the people - one critical thing needs to be borne in mind: The ability of the Government to allocate such a substantial package to the people is only possible because of our policy of fiscal prudence. Without the funds generated from two years of successive economic growth, such a comprehensive social package could only remain a dream. And good economic growth can only occur with witty economic and fiscal management by a responsible Government - this is something that Singaporeans must always bear in mind.

Looking through the Budget book, one could not help but noticed that projected operating expenditure at $24.48 billion (as compared to $21.59 billion in the current fiscal year) and the generous handouts coming from special transfers totalling $3.59 billion is setting the Government back by $2.86 billion - the largest budget deficit as far back as one could remember. Election year as it may be, it highlights the Government's willingness to periodically share the fruits of economic success with its citizens and doing so in such a manner that the lower income strata and the needy will be the primary beneficiaries of the handouts. I am proud as a Singaporean that we are in a position to be able to conduct such an exercise to the envy of many nations in the world that can only afford to dream about.

Sir, the key question here is whether this year's landmark Budget represents a departure of our budgeting policy in that the Government will continue to narrow the widening income gap by way of such top-ups at the expense of budget imbalances. I know the money has to come from somewhere but our goal must be to continue to find ways and means to pull the lower income strata up so as to prevent the emergence of a community that lives on the fringe - an underclass that loses hope entirely. Hence, the Progress Package is appropriate from time to time if there is money in the kitty to be distributed but what is important is to ensure that we continue to invest in schemes and put in measures that will enable all Singaporeans to remain relevant to the changing needs of the economy, as we fit and flex ourselves to the ever shifting profile of globalisation. It is about skills and knowledge upgrading so that employability is sustained and enhanced, and also job creation and redesign so that low paid workers can upgrade their jobs and be kept motivated to remain employed. Money spent for such causes for sure will not go to waste.

Sir, let me now turn to what the Budget means for the business community. In the several meetings my GPC had with the Resource Panel and industry groups, there were some murmurs of disappointment but overall, the majority of them expressed understanding that the budget focus this year is about sharing surplus with Singaporeans, particularly those who are most in need of help. Furthermore, a large number of measures and incentives have been put in place in the past few years to strengthen our economic foundation, whose effect has yet to permeate through the economy.

On taxation, Sir, many SMEs were hopeful for a tax break, arguing that the tax savings could be ploughed back into the business for more meaningful purposes. However, the Prime Minister highlighted that Singapore's headline corporate tax rate of 20% is already among the lowest in the region and the effective tax rates of 5.8% for manufacturing and 6.6% for the service sector are near the lowest in the world, based on the 2005 Tax Competitiveness Report of the C.D. Howe Institute. In fact, Singapore ranked lowest with a 6.2% average with Hong Kong, our regional competitor being third lowest at 8.1%. Turkey was surprisingly second lowest, in spite of having a 30% headline tax rate.

In this regard, I would advocate that Singapore should capitalise on this as a major selling point to foreign investors, beyond the multitude of advantages that Singapore has to offer as an investment location.

The tax rate averages are obviously based on aggregated data. I would also like to propose that the Finance Ministry break this down into sectoral tax statistics to understand the tax effect on various sectors and especially the SMEs. We

Sir, notwithstanding our low effective tax rates, I would like to draw attention to the fact that we are behind Hong Kong, in terms of the fiscal burden ranking, based on the Heritage Foundation's 2006 Index of Economic Freedom. This means that companies that are here or are intending to locate here, which could not benefit from our host of tax measures and incentives, are subject to headline tax higher than that of Hong Kong's.

While this is not the most efficacious issue, it is a significant link in the decision-making process. I would like to propose that the Ministry of Finance take a protracted approach to reviewing this matter by projecting this over a period of, say, five to 10 years, to understand its medium to long-term impact on the fiscal burden of companies operating on our shores.

Sir, more significantly, the Budget did not introduce any increase in tax in spite of its large projected deficit. On the contrary, it is worthy of mention that a slew of changes and measures were crafted with the aims of (i) strengthening our foundation as a knowledge and innovation-driven economy, and (ii) preserving our competitiveness amidst increasingly aggressive regional and global competition.

If one studies each of the 30, or so, elements in the newly announced changes and refinements of the existing taxation frameworks closely, it is apparent that they are targeted at maintaining "our first mover advantage as a nation and increasing the gap between the first

The budget adjustments this year also demonstrate the Government's readiness to adjust and implement innovative changes not only in response to the competitive landscape but also to continually position Singapore as far ahead of the curve as we can get. But, Sir, beyond the much welcome changes, there are improvement suggestions to some of the measures that I would like to make here and a few more specific ones during the Committee of Supply debate.

First, in spelling out the main objectives of the Budget, I am pleased to note that a slew of measures have been announced by the Prime Minister to propel our economy forward. Tied to positioning Singapore to become a knowledge hub in Asia is our extensive investment in research and development (R&D). Apart from the announced $5 billion R&D Trust Fund, the current Science and Technology Plan 2005 has $6 billion set aside,

should endeavour to understand the extent of how well our SMEs are benefiting from the many schemes and measures devised specially for them and educate them of how these can translate into tax savings for them.mover and the second mover", if I may quote Pok Soy Yoong of Ernest and Young. I am comforted that over the last week after the Budget was unveiled, there was significant analysis being done by the finance and accounting fraternity about the benefits that lie behind the Budget, and it is my hope that these are cascaded down to the business community, particularly the SMEs.

which includes $4 billion to boost local R&D capabilities and $2 billion to promote local private-sector R&D. In the very recently released S&T Plan 2010, the Government is earmarking a whopping $13.55 billion to several agencies to propagate R&D at various levels. This is truly serious business to set us ahead in the economic marathon that has no finish line.

While this pursuit will undoubtedly make Singapore an increasingly attractive knowledge hub and create high-end activities and correspondingly high-quality jobs, my concern again is how our SMEs could reap a fair share of these huge

I know there are the long-standing LETAS and LEFS schemes to support technical upgrading and provide low-cost financing respectively, and the more recently introduced schemes, such as the GET-UP Programme and the Operation and Technology Roadmapping (OTR) and the Technology for Enterprise Capability Upgrading (T-Up), to help SMEs develop Technology Roadmaps and enable them access to researchers in research institutions. But let me ask: how many have taken up such schemes, particularly the technology-related ones? I am quite confident the numbers are low.

We need to do more for the SME sector to have them leverage on technology so that they remain relevant in this increasingly competitive business environment. I would like to propose that we establish a coordinating body where SMEs could readily approach to assist them in assessing their technology gaps and pairing them with appropriate research institutions to help them move up the technological ladder. Strong incentives should be given in key technology areas, such as precision engineering, food manufacturing, photonics and logistics, to spur them to innovate and deepen their capabilities. The incentives should extend to include product and process development and commercialisation of their R&D efforts.

Considering that many SMEs are supporting large MNCs in many aspects, the centre could also play a catalytic role in bridging collaboration between the two parties in terms of participating in some of

Sir, the PM also mentioned that IPR protection is a crucial factor for R&D to sink deep roots here. I agree with the PM that Singapore has built a name for itself as a trusted party for foreign businesses to locate their high content activities in our country. I have no doubt that this will further boost high-end activities here but, again, my concern is for small and budding entrepreneurial businesses here. The IPR concept is alien to many of them. With the Government strongly emphasising entrepreneurship as an alternative to jobs, the education on IPR should also begin at the school bench and permeating through the rest of the SME community.

To foster and speed up innovative activities among new entrepreneurs, it would be beneficial to provide an IPR infrastructure that is relatively inexpensive, less cumbersome and accommodative of inventions with short commercial life. This will help to promote and support a culture of innovation and enterprise and assist start-ups.

Australia has two systems of second-tier patents: petty patents and innovation patents. The development of the Australian second-tier patent protection is premised on the need for a quick, less expensive and more easily obtainable patent protection for product inventions with short product life cycles. I would like to suggest that we look at these models and modify them to suit Singapore's evolving entrepreneurial needs.

This brings me to the subject of entrepreneurship per se. The economic difficulties we were confronted with as we entered the new millennium have encouraged many young Singaporeans to try new and different approaches. This is encouraging because, as our economy

I know the Government is creating as supportive an environment as possible to foster entrepreneurship. But if we are serious in wanting Singaporeans to take on entrepreneurship as a career option, we must make sure that, from secondary school, our students learn to think beyond Singapore due to our small market. As Minister George Yeo puts it, "Our minds must be much larger than our geographical confines. If we are too home-bound in our thinking, we will not succeed."

Sir, recognising the need for entrepreneurs to look beyond Singapore, they have to put up with greater risks when venturing abroad and, more often than not, will require financial staying power to get their ventures to take off. In this regard, Sir, they could certainly benefit from more tax reliefs, such as more generous treatment of carry-back of tax losses beyond the $100,000 relief that was granted in last year's Budget.

Sir, let me now move on to the subject of retirement funding. With increasing life expectancy of Singaporeans and the Government's position of steering clear of state welfare programmes for

The majority of Singaporeans can only look up to the CPF - for whatever little there is to look up to - for their retirement. It is now more evident than ever that the CPF, with the lowering of employer CPF contribution ceiling caps based on salary level and contribution rates based on age, has resulted in reduction in retirement saving rates as a percentage of salary for many employees. Similarly, the Supplementary Retirement Scheme (SRS), unless revamped, is stagnating, because its contribution cap is stringently tied to declining CPF contribution and it is also stifled by its own complex mechanisms and restrictions.

Several Members of this House, including Miss Penny Low and myself, spoke on the need to thoroughly review this scheme and proposed the urgent need to set up a task force, but our calls went unheeded. With this second call, I hope that at least some attention could be given to the SRS which, in fact, started as a promising scheme but now appears to be heading for a natural death.

Sir, the adequacy of the retirement nest-egg for Singaporeans is in a serious state. Looking at current demographic trends, it can only get worse, if nothing is done at this juncture. With this current state, we are not even referring to provisioning for retirement enjoyment, save those in the high-income bracket, but merely having enough to survive the twilight years.

It appears that the main way forward to ensure sufficient provisioning for retirement, other than people undertaking to save more for their own future needs, is to encourage employers to contribute to it. In this regard, several employer groups

This would entail a re-examination, Sir, of section 5 of the Income Tax Act. The lack of implementation of schemes at the company is attributable to seemingly complex approval procedures and the high establishment and administrative costs. It also currently prescribes that each company implementing such a plan operates its own trust fund, which makes it expensive to manage.

Basically, I would like to propose that this section be amended to permit companies to establish retirement schemes that will allow employers and/or employees to contribute directly to a retirement savings plan. It could be loosely modelled after the US section 401(K) scheme. The contributions would be in addition to CPF and should be structured such that employee contributions are simple to make, are tax-exempt, and that the accumulated benefits are portable. To keep costs low, companies, especially SMEs, should be allowed to pool their funds under a common trust manager for economies of scale. Participation of the fund should also be extended to foreign employees, especially executive talent, as such people cannot participate in the CPF scheme.

Sir, as I noted last year, if the SRS could be repackaged and section 5 could be revamped taking into consideration the points that I just raised, these could draw economic benefits beyond just meeting the needs of Singaporeans. They would have positive implications on the wealth management industry as well. If long-term products with attractive tax benefits could be offered, they would not only attract foreign talent who would be

I would like to repeat the proposal made last year, that a Special Task Force be formed to conduct a holistic review of the SRS and section 5 to enable more channels to be opened for retirement savings.

Sir, reverting back to the other changes unveiled to improve the competitiveness of our tax regime for businesses, many of these changes were hailed as innovative and forward-looking. However, some of them could be tweaked for better clarity or to make them more attractive.

First, Sir, on Islamic finance and banking. I am glad that there has been quite intense activity in this area since the Minister for Finance announced the removal of double imposition of tax duties on Islamic transactions involving real estate, and also accorded concessionary tax treatment on Shariah Bonds during last year's Budget. Senior Minister Goh's several visits to the Middle East, coupled with a series of signing of FTAs with a number of Middle Eastern and Gulf state countries, further underscore our seriousness in seeding Islamic finance and banking in Singapore.

The recent Budget further proposed relaxation of tax treatment of qualifying Islamic financial products, which is certainly laudable. However, Sir, the gains or profits earned by the financial institutions in lieu of profits will be recognised as interest. Unfortunately, the concept of regarding them as interest in the books of the financial institutions is insensitive to the belief of Islam. Interest or riba is haram or forbidden in Islam. It may be quite all right for a conventional bank with an Islamic finance window to

Next, under Qualifying Foreign Trusts (QFTs) which are taxed at the concessionary rate of 10%, while the incentives would be enhanced in the proposed change, the current position is that a trust would be regarded as a qualifying foreign trust if its settlers and beneficiaries are individuals who are neither Singapore citizens nor resident in Singapore, or foreign companies. I feel the current definition of QFTs is rather restrictive. Its expansion to include other forms of legal entities would further enhance the effectiveness of this incentive in exempting income derived from trust arrangements.

On Foreign-Sourced Income Exemption (FSIE), the proposed change would grant tax exemption to the current FSIE regime, if they are remitted under certain scenarios or circumstances, with details to be announced in due course. The expectation is for the specific scenarios or circumstances to include:

Dividend income remitted from foreign holding companies which, although not subject to foreign tax at the holding company level in the foreign country's jurisdiction, is subject to foreign tax at its subsidiary level in that jurisdiction. Consequently, the underlying income would be subject to double taxation, both at the foreign level and, once again, at the Singapore parent level, on remittance to Singapore;

funds set aside. MNCs know very well what to do to take advantage of the funds, but how do we make the schemes more easily accessible to our SMEs so that more could become the MNCs of the future? We must never forget that they form an integral part of our enterprise ecosystem and provide significant employment to our workforce.the R&D needs of MNCs, so that our SMEs could continue to meaningfully support the needs of the MNCs.matures, the job market profile will change radically and, therefore, entrepreneurship should be looked upon as a serious alternative to full-time employment. I am encouraged, for example, to note Douglas Foo's Sakae Sushi chain of restaurants has spread to cities like Beijing, Bangkok, Jakarta, Surabaya and Manila. This is an example of a Singaporean capitalising on a market niche. Owing to their limited resources, we need to equip our small companies with the skills to focus on very specific areas where they can develop sustainable competitive advantage in. They can develop strong competencies when their resources are focused in narrow areas. retirement, it is imperative to ensure that Singaporeans have sufficient funds to carry them through this uncharted phase of their lives.that my GPC members and I met with, strongly advocated that existing legislation governing tax approved schemes are widened and made more flexible so as to enhance their appeal to both the employer as well as the employee.satisfied with a flexible pension package available to him, but also foreign nationals who are always on the look-out for safe and tax-incentivised environments to park their funds.record such earnings as interest, but I would like the Minister to consider being more liberal in allowing pure Islamic institutions desirous of setting up here to use another suitable terminology other than "interest" without changing the accounting treatment. Such flexibility will go a long way in attracting more Middle East funds to Singapore.

Foreign sourced income, which is not subject to tax in the foreign jurisdiction but significant business activities are carried out in the foreign jurisdiction.

Sir, these are just a few examples where further fine-tuning or removal of uncertainty would help in the process of creating a higher degree of dynamism in the wealth management environment here.

Being the most politically stable country in the region, coupled with our diverse language ability in English, Chinese, Malay and Tamil, Singapore is well-positioned to reach out to the rapidly increasing number of wealthy people throughout Asia who will want to invest their excess funds to generate good returns.

Increased vibrancy of the wealth management industry which is robustly regulated, will also bring with it a whole spectrum of ancillary services such as more sophisticated legal and accounting functions, custodian services, etc, and also with it, the much sought after top talent that will develop and equip more Singaporeans with a new set of financial and corporate management skills. It will generate higher business volume, bring greater critical mass, which translates to higher corporate tax collections, increase in the pool of wealthy people, which in turn would enable the Government to collect more individual taxes and, therefore, hopefully contribute to budget surpluses in future years.

To conclude, Sir, I would reiterate that this Budget is indeed a landmark budget in that it delivered on the Government's promise to plough back the fruits of the past two years' economic success while at the same time, it introduced innovative initiatives to develop fresh industries and build on our country's own intellectual property.

I am confident that it would go a long way in reinforcing to Singaporeans of the Government's endeavour to build a strong, caring and inclusive society as we forge ahead to enhance our relevance to this globalised world.

On that note, Sir, I support Prime Minister Lee's Budget Statement.

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Sir, this year's Budget is indeed a people's Budget and rightfully so.

After many years of restructuring the economy, it is time that we did something to address the impact of the economic restructuring on the people of Singapore, and, as expected, the impact of the restructuring exercise on the people has been very significant. We have seen people losing jobs, especially manufacturing jobs, rendering many of our semi-skilled and lower-skilled workers having unusable skills for the jobs we created in the last few years. Our professionals, especially the middle-aged, have lost jobs in multinationals which have restructured or relocated and our older workers have not found the favour of employers. All these are permanent structural changes which cannot be addressed by the one-time initiatives like the ERS or the New Singapore Shares or CPF top-up schemes. We need a more systematic approach of solving these problems to help people affected by the restructured economy on a longer term basis.

While other countries have a social welfare system to give comfort to the workers that should they lose their jobs, they have something to fall back upon, in Singapore, up to now, it has been every man for himself except for the low-income or needy Singaporeans. I am therefore glad that we have finally devised a system to systematically help Singaporeans for

The Budget, however, did miss out on one important group of Singaporeans and these people have been called the sandwich group or the "asset-rich and cash-poor" group, a generation of those who bought into the Government's asset enhancement policy. Many of them live in bigger flats or in private apartments. It was an era where we all encouraged everyone to aim for the Swiss standard of living and go for upgrading of our properties every seven years, as one Minister once told me. It was an era where we were told that we should continue to aspire for greater things. Throughout the prime of their lives, from the ages of around 25, when they started working, till the time they became about 45, that is about how old I am today, everyone aimed and stretched their incomes to pay for the high prices of the bigger properties than what they should have bought. Worse still, the fact is that many of them are on negative equity on their properties right now, which means that they cannot lighten their burden by simply selling and downgrading their properties.

So while the Budget seems to be a broad-based one, it missed out on this significant group of people. This group is a growing one and many have been hit by retrenchments or are potential targets for retrenchments as the economy continues to restructure. We know of many cases where double income families have suddenly become single income for prolonged periods of time. Employment remains elusive and they find it difficult to land jobs because of their age. They will have little benefit from the WDA's schemes and they will become the more difficult group to retrain and to deploy to

What about businesses in this year's Budget? The Budget seems scarce, in terms of initiatives to help companies, as my colleague, Dr Ahmad Magad, has mentioned. But I expected this year's Budget to be a non-event for businesses and many businesses also felt that way simply because over the past three years, after we released the Economic Review Committee's recommendations, the Government has implemented many measures over the years and these have helped us restructure the economy, the impact of some which we have already felt, like those addressing the cost and tax issues, while the impact of others has yet to be fully felt. Therefore, I think businesses did not expect much this year.

However, because of the low expectations for companies, I am quite happy that the Prime Minister continues to fine-tune our system of taxes to make them more effective in terms of reaching the target areas. Examples like the zero-rating of tools for sub-contractors, the zero-GST warehouses and in anticipation, the fine-tuning for the Foreign Source

Sir, I would like to touch on three topics today and many of them have got to do with the ERC's recommendations. First, Government-linked companies (GLCs). While Temasek is actively going abroad with its multi-billion dollar spending on acquisitions, and this is one of the recommendations that we made about GLCs expanding their external pies, I also notice that GLCs remain active locally. The question is: how successful have Temasek and other GLCs been in growing their external businesses? While I am not advocating a sudden scale down in Singapore, I want to be sure that GLCs can really become effective when they face real market competition outside their comfort zones in Singapore. I am, however, encouraged by the results shown by some companies, for example, SingTel, but there is less than obvious success for most other GLCs. I worry about the example of DBS having to write-off a huge amount as a result of the acquisition that it did recently. Perhaps, the Prime Minister can share with us the other success stories of GLCs which might not be so obvious to all of us.

Sir, one of the recommendations in the ERC was for Temasek to focus its stable of companies to aggressively grow the global businesses and I am encouraged that it is doing this directly by making those big ticket items and we should continue to do this. While on the topic of GLCs, I notice that we continue to have high level of involvement by our political leaders in GLC business activities,

Sir, the specific recommendation that we made in the ERC was, and I quote, "Ensure GLCs are commercially run, with no interference from the Government". I guess we have failed in observing this practice and I suggest that we do something about it. Perhaps, we should just appoint MM and some of the Ministers permanently onto the boards of some of these GLCs that still need guidance to avoid such adhoc disturbances by Government in such companies.

Sir, the second topic is on the issue of promotion of entrepreneurship. There has been a significant shift in mindset which the ERC proposed and the outcome was the formation of the Action Community of Entrepreneurs or ACE. The progress made by ACE has been encouraging and we managed to get the buzz about entrepreneurship going, and why has this been possible? This is because we have developed a unique model where ACE is mainly a private sector-driven initiative chaired by a Minister-in-charge of entrepreneurship, who in turn acts as a champion for ACE, or the private sector, in Government, especially at the Cabinet level, where it matters most in decision-making. So we have been able to make

Sir, many have asked about the success of ACE and our success of promoting entrepreneurship. My answer is: please have patience. Rome was not built in a day, as they say. We have not created many world-class companies but are getting there. I ask the Government to have patience and have faith that the process is the right one and eventually the results will be good. We have been very late in our entrepreneurship promotion efforts. We should have started in the mid-1980s when we saw the first signs of stresses on our economy. We still have issues with some Government agencies.

the longer term. The Workfare Bonus and the Opportunity Fund are the two most exciting developments this year and are very well-targeted so that we derive the maximum gain that we intend to. We all commend the Prime Minister for this.new jobs. Because they are "asset-rich and cash-poor", they will not be getting very much from the schemes that we have devised. While I fully support and agree that the schemes will help about 45% or so of Singaporeans, we should have taken the opportunity to be a bit more generous with the Progress Package to help this group of people because they are not living in three or four-room flats. These days, when I sit around with a group of people of my age, the conversation is one of fear of losing their jobs, about the bleak future for the middle-aged and also about how they will have to struggle upon retirement. This is definitely not a healthy sign and we need to find a way to give greater confidence to this group of middle-aged Singaporeans.Income, should be considered a bonus for businesses. I therefore agree with the Prime Minister that we have done quite a lot in the last few years, especially after the ERC's recommendations and we should wait and see the impact of all the measures and then make a review in a couple of years to gauge the effectiveness of the measures and then think of new things that we can do to further strengthen our economy.including listed companies. A case in point is the recent involvement by Minister Mentor with SIA, suggesting to the board and management on what business directions to take. Sometimes, I wonder why we have such high level board members appointed to such companies when they, the board members and management, still have to be guided by the likes of MM Lee, who has many other things to do too. MM suggested that SIA should spin off some of its businesses which seems very odd to me, especially when such issues are price-sensitive for listed companies. In this particular case, for SIA, I recall the share price of SIA sky-rocketed as a result of this recommendation.many changes and implement many new initiatives which ordinarily the old approach of governance would not have been able to achieve. This unique private sector and Government partnership has allowed us to achieve things like rule changes through ACE and also the good work of the pro-enterprise panel, another private sector-Government partnership. We have managed to introduce many new initiatives in the area of financing to support start-ups as well as SMEs, all again driven primarily by the private sector. So what is it that made things work for the promotion of entrepreneurship which the Government could not do well in the past? The answer must lie in the new approach of getting the private sector to drive things, with the support of Government agencies, which placed a greater faith in the private sector, believing that the private sector too can think and help shape policies and help develop the economy and the country and it is not the responsibility of the Government alone. And if we believe in this private sector contribution to policy-making, perhaps, we can take it to the next level and have private sector input at the highest level of decision-making - have nominated Ministers, who are not elected but appointed from the private sector at Cabinet level. I am confident that the quality of decision-making will further improve if we do this.Those who understand what it takes to develop an entrepreneurial economy and in supporting smaller companies, like SPRING and IE Singapore, have been doing many right things and have been pro-actively supporting the initiatives in the promotion of entrepreneurship and local companies while others remain closed in mindset and in efforts to help in the process. An example is the effort which I undertook last year to review the various Government

incentive schemes, the 60 plus or so schemes which exist today. We had a very good start in reviewing the schemes, which was reviewed by a task force I formed, composed mainly of private sector people. We managed to identify weaknesses and improvements for a number of schemes, a report of which we submitted to MTI for review. Of the 60-plus schemes, my committee managed to look at eleven so far. The outcomes have been encouraging and also encouraged us to look at the rest of the 60 schemes. But we did face roadblocks in that some agencies did not want to cooperate with us and we could not get the process going further, causing us to miss our deadline of reviewing all the 60 or so schemes that we had hoped that we could review. Therein lies the second problem affecting our efforts to create a pro-enterprise environment and that is the reluctance on the part of some civil servants at best, and civil servants, becoming obstacles in the worst case. We need a collective effort and everyone to become believers if we want to succeed in this effort. But, on the whole, we have made very good progress in the promotion of entrepreneurship and we should not slow down our efforts. We still have a lot of catching up to do and I am quite happy that the Government has been very supportive at the overall level of activities.

Sir, the third topic is on the tax structure and CPF. We have now reduced

One issue I have about the tax incentives, and for that matter the way many Government incentives are administered, is the preference typically given to foreign companies, whether intentionally or unintentionally, because of the way the schemes are designed, for example, the various pioneer tax status of global or regional HQ status. One of the most unfair schemes is the Global Trader Programme where many of our local traders cannot qualify although the type of activities they do is no different from that of foreign traders who are attracted to Singapore because of this Global Trader Programme tax incentive. On technical grounds, local companies fail to qualify for this tax status. I should perhaps, at this point, declare my interest as the owner of a local trading company. This issue has been brought to my attention not because of my company, but through discussions in the feedback sessions that I have with some of these companies and local traders who actually have relocated out of Singapore into places like Dubai because of their feeling that Singapore is becoming less attractive. So if we can relook at how these schemes are designed and do some fine-tuning, our local companies too

Sir, I believe that the CPF system is also due for another review and while the ERC did put in a commendable effort to make good recommendations, it was limited by what it could change because of the boundary conditions that it was given. Specifically, because the mindset was that the CPF remains primarily a retirement scheme, the changes recommended are not good enough to address the changing needs of Singaporeans. In fact, it is no longer effective as a retirement scheme. It looks more like a scheme for housing and investments. Over the years, we have lost the effectiveness of the CPF so much so that we are in trouble because Singaporeans will not have enough for their retirement. The CPF, therefore, needs some revamp for us to effectively achieve all the traditional objectives and the new needs to help the sandwich group of Singaporeans.

The first issue is on the returns we get from the CPF. We all know that we will not have enough money to support our lifestyle upon retirement for most Singaporeans and, especially with life span increasing, it is indeed a matter of great stress for many of us. One of the first things that we need to do is to source for better returns on the funds that are being managed on behalf of the CPF. While the interest that we receive from the CPF savings of around 2.5% looks better than some bank savings rate, if we compare the CPF returns to the returns of pension funds from around the world, the 2.5% is a very low rate. Then, if we look at the returns that Temasek and GIC are making for the funds which they invest on behalf of Singapore, the returns are much higher than the 2.5%. So something needs to be done to liberalise the CPF funds closer to private sector fund management like pension funds in other parts of the world or perhaps the

Sir, the second thing I suggest on the CPF is that it should now switch its role from a primary retirement scheme to a dual role. This would help address the issues I raised about the sandwich group of Singaporeans. The primary roles, instead of being primarily to serve the retirement needs of Singaporeans, should perhaps include the need to address retirement as well as retrenchment. The operating principle of our Government has been for Singaporeans to help themselves in times of need and also be responsible for their own retirement. I agree with this basic principle. In order to effectively achieve this at the operational level, every Singaporean must save for their retirement as well as for a rainy day and this rainy day includes medical needs and, lately and increasingly, potential retrenchments and extended periods of unemployment. The Government cannot possibly take care of everyone and, therefore, the programmes at WDA and Workfare cater for the lower income and the lower skilled Singaporeans. But what about the sandwich group of Singaporeans?

Many of us in this House have over the years suggested the use of CPF as an alternative retrenchment benefits scheme where members borrow from the CPF. While this is an attractive proposition, the Government's argument has been that it is impossible as the CPF system is already overloaded with needs like housing, medical care, investment and education, including retirement, being fulfilled by the CPF system. Also, how do we possibly do this given that even the basic treatment needs cannot be fulfilled by the CPF? So unless we start with a new

Sir, in conclusion, this year's Budget is indeed a people's Budget. It has rightfully helped the people badly hit by the restructured economy. Many Singaporeans will continue to be affected as the economy continues to restructure. We have not ended it yet. We need to have in place the right support measures to help Singaporeans if and when they are hit by retrenchments and when they face prolonged periods of unemployment. We have entered a new era where we need to be realistic about our expectations in that we should not unrealistically commit to more than affordable assets like houses and cars. A greater proportion of our disposable income should go towards retrenchment and retirement support and the Government could play a role by formalising this support structure through changes in the CPF system or any other system. Sir, on the business front, we should keep our momentum of transforming our economy to an entrepreneurial economy. We should not think that things will be back to normal again. The world has changed and we must continue to change fast. We have

Sir, I am very happy that with the series of Budgets that we have seen over the last three years, since 2003, which were intended to restructure the economy and now the final touch of taking care of people who have been affected by the restructuring is a master touch at the right time for all of us. Sir, taken as a package, the Budget over the last three years, we have one of the most enlightened Budgets in a long time.

Sir, I support the Budget.

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our headline tax rate to 20% and this has been effective in attracting some businessmen, entrepreneurs and companies to locate in Singapore. But I urge the Minister to continue to watch the changes going on around the world. In Europe, for example, tax rates are starting to come down. In Ireland it is already at about 12 1/2%. Hong Kong just made a small change a few days ago. So we have to be prepared to make reductions if there are further reductions around the world. I know that this is a tough balance of income and expenditure and if we want to continue to have Government-driven programmes for the good of the nation the key thing is that we need to remain competitive. And if some day, others can manage to live with lower tax rates, we must also learn to do so.can feel that they are fairly treated. All they need is a level playing field.Government should return more than the 2.5% since the funds it manages through Temasek and GIC yield much higher than the 2.5%. If we can increase this percentage perhaps we may have a better chance of having enough money to spend upon retirement.mindset that there need to be two equally important roles of the CPF, we will never be able to find an amicable solution. If we can think in the new mindset, then perhaps we can have additional savings made compulsory during productive employment years to help during years of unemployment, or a national unemployment insurance programme being implemented as a an integral or a subsidiary part of the CPF. I do not intend to talk about the perfect solution but how we can get to a solution by rethinking the role of the CPF as having dual objectives of retirement and retrenchment. I am quite confident that we will have the right solution once we can settle this issue. I support Mr Ahmad Magad's recommendation that we form a panel to just look at this retirement issue.all the right ingredients and now it is for us to make it work for us.

Mr Speaker Sir, like Mr Inderjit Singh, I also agree that this is a budget for the people. In fact, I suspect most of us who stand up would say that it is a people's Budget. In this Budget, we took care of the people, in particular the poor and the down-trodden. I congratulate the Prime Minister for this very generous Budget. I too want to congratulate the Ministerial Committee on Low Wage Workers headed by Dr Ng Eng Hen. He deserves our appreciation for his recommendations and also for winning the argument to share the fruits of progress as proposed in the $2.6 billion Progress Package. Sir, it is well known that medical doctors are people with deep compassion for the underdogs. The compassion shows through in this particular Budget.

Sir, the Singapore economy has indeed done well in 2005 and most Singaporeans are better off now than at the depth of the recession, except the poor and the old. Furthermore, there emerged a class of new poor as a result of structural unemployment. In fact, Sir, I was trying to come out with a definition of "new poor" but listening to Mr Inderjit Singh, I think he has done a very good job defining what is "new poor" - people who are affected by structural unemployment.

In so doing, in taking care of the poor and old, this Budget has indeed covered all the bases. In giving every Singaporean an ang pow, the Prime Minister skews the benefits towards the poor and the old and I believe it established a new precedent and also several new principles.

Let me look at some of the principles. First, the Budget confirmed that in sharing surpluses, the Government has committed that the poor should get more than the rich. This is a departure from the previous approach of equal sharing regardless of needs. To many of us, we think it is an improvement.

The second principle: the Budget helps those who help themselves. Thus, it provides incentives for low-wage workers to find a job or to keep a job when otherwise he might not have taken up those jobs. For instance, there are many jobs in Tuas which could not be filled because of transportation costs. Perhaps with the incentive provided in this Budget, some workers might now find it worthwhile to travel the distance and incur the expense to take up those jobs. In this respect, I also support the CPF top-up scheme for low-income workers to own their homes, enabling them to own a stake in the nation's prosperity. Of course, on the other hand, we should be careful not to enslave those who cannot afford home-ownership in the first place by over promoting home-ownership as a Government policy.

Sir, just in case that we are overwhelmed by the generosity of this Budget, I would like to take a step backward and look at this Budget and see how it deals with the challenges faced by Singapore through its impact in the following timeframes: future, mid-term and immediate.

Looking into the future, the Budget allocates the first disbursement of $500

This time round, the R&D is headed by none other than the Prime Minister himself. Sir, given the complexities of public funded R&D, I would like to wish the Prime Minister great success in this new effort. Picking out winners in the R&D race is important for Singapore's future. However, because we could only see the fruits of our efforts some time in the future, we cannot depend on this effort to have an impact on the job market in the next 5-10 years.

Sir, I like the various proposals in the Budget for the education for our young, such as the Opportunity Fund for the schools, in the sense that the schools can then be more creative in the programmes they could offer to our children. I support the allocation for kindergarten education to ensure that all young Singaporeans would start their formal education as well prepared as others. In the field of education, I agree that if we could do more, we should. However, I am surprised that the MOE is funding breakfast programmes for our children. Sir, I am not aware that there are many children in Singapore going to school hungry in the morning. In fact, if anything, our impression is that the children in Singapore are getting bigger and fatter at a younger age. The sizes of our school uniforms and children's clothings are larger than children of poorer countries.

Sir, let me look at the mid-term impact. In this area,

million of the National Research Foundation. This is in line with the vision of Singapore, establishing Singapore as a knowledge hub. In a way, this emphasis of a knowledge industry is a return of the previous emphasis of the old Government promotion like NSTB or A*Star R&D programmes. I wonder whether the Government was satisfied with the success of those efforts in the earlier years. To an observer, by the way the various R&D institutes had been reorganised, presumably, the effort was less than stellar success.Moreover, the onset of diabetes in our citizens is occurring at a younger and younger age. So, I am not sure that MOE's effort is all that necessary. But even if we do, even we need to help children who go to school today hungry, I thought this would be better left to voluntary organisations rather than taken up by the MOE.

I am also echoing the disappointment of Mr Inderjit Singh, in the sense that the attention of the Budget did not particularly address this particular area. While there are some tax measures to promote the economy, in terms of tax cuts, they are actually pale when compared to the other measures being taken, in particular, of course, the Progress Package. The plight of the SMEs, which the Prime Minister is very familiar with, has not been addressed. As tax measures will take some time to take effect, I am disappointed in the sense that we are not putting sufficient weight on the measures to help the industry that will show tangible results in the next few years. Perhaps the Prime Minister has decided to deal with this problem sometime in the next term of his government. This is worrisome, because I think we might be taking our eye off this problem on the assumption that things have returned to normal. Because, I believe, that job opportunities to be generated by the local SMEs are important. Given that direct foreign investments brought in by the EDB tend to be high-end, SMEs are the companies that we must nurture so as to provide young Singaporeans today with fruitful and rewarding careers in the near term.

Clearly, Sir, the emphasis of this Budget, in particular, the Progress Package, is to help Singaporeans in the immediate term. Every adult Singaporean, including overseas Singaporeans, will

In his speech, the Prime Minister anticipated some of these and mentioned that we would change our policies based on our experience of undesirable outcomes/results. Sir, this is easier said than done.

Now, let us see how we are setting the stage of great expectations for every general election sometime down the road. To me, Sir, the stance adopted by this Budget reflects two shifts in Government's management of fiscal surpluses.

First, in sharing the nation's surpluses, the Government is handing out an all-cash disbursement for the first time. In the past, the disbursement was in the form of shares, which some could and indeed keep for their future while others cashed them. In a way, this reflects the recognition that for the lower-income groups, holding on to shares is not a preferred approach. We have, in a way, given up any attempt to camouflage the Government's handout as subsidies, welfare payment or negative income tax.

Second, the Government has been changing its perspective of balancing the Budget from an annual basis to a "term of government" basis. In other words, instead of balancing the budget every year, I can see the Government shifting to balancing the budget over the term of Government, which could be as long as five years, theoretically. I have observed this gradual change over the years after the amendment to the Constitution on the preservation of the reserves. But with this Budget, this shift of stance seems to be permanent. For the current Government, the term started from the date the Prime Minister was sworn in as Prime Minister. Since the Prime Minister has declared that he is not dipping into past reserves to fund this year's unprecedented deficit of $2.86 billion, I can deduce two facts.

First, it is clear that the deficit of $2.86 billion has been provided for in the management of the Government's finances since this term of government took office. Indeed, when I spoke on the Budget Statement 2005 last year, I asked why was the NII recognised in the Budget lower than the previous year, ie, Budget 2004. In fact, NII recognised in 2004 was $0.82 billion lower compared to NII recognised in Budget Statement 2005. Now, I think we know. The difference is being salted away for the Progress Package.

Second, I think we can deduce that the current term of government will end before this financial year. Otherwise, no Finance Minister could be so confident to make that statement of not dipping into

In this sense, Sir, I believe that from this year onwards, every future government will be tempted to reap political dividends through a people-oriented Progress Package at the end of its term; thus, starting a new cyclical trend which I will call "election year budget". I expect to see a trend where the Government will maintain a balance of revenues and expenditures for most years of its term of government, while recognising less than the statutory limit of 50% on return of investment from past reserves in that year's Budget. The rest will go into reserves. But, as we all know, only 50% of the NII would be locked into past reserves. The balance could be tapped for future Progress Packages. Then, at the end of the term of government, in delivering the Budget on the year of the election, the Minister for Finance could pull out from his hat a Progress Package with goodies for everyone. I think this will be the expectation set up in the public mind and, indeed, this is my major concern about this year's Budget. The question is whether setting up an expectation of Progress Package in future election years is good or bad.

I first described our reserves as our "oil well under the ground" in this Parliament a fair number of years ago. I described NII as our black oil oozing out from the well and that Singaporeans should be indebted to the Government for managing and protecting our reserves so successfully. When I spoke on this, I was urging the Government to make use of the

Sir, I will move on to other topics which I have, in fact, asked for in previous budgets. Many people have brought up the increment for the Singapore pension in the past. I did it last year and I am doing it again this year. I will ask whether the Minister would spare a thought for the pensioners on the Singapore Government pension scheme. If he could just review it, maybe this review would be like his visit to the fruit machine room in the NTUC. The pensioners might hit jackpot as well!

Sir, in conclusion, I would say that everyone I have spoken to is happy with the Budget - some happier than others. Most are looking forward to cash in hand. A small minority is concerned about the lack of attention paid to the challenges facing Singapore, in particular, in the mid-term. Some of them have asked: within the next few years, what could they do? It seems like we are looking at the IR as a solution. But how long can we depend on the Integrated Resort for the prosperity of Singapore? How do we convey to the younger generation that they should be confident and enthusiastic about their future in Singapore? The Prime Minister did not address some of these questions except in passing. I hope he will do so in future Budget Statements.

The Progress Package is welcomed by Singaporeans. This will render the ground sweeter for the ruling Party in the coming general election. Whether we will set up this expectation of election year budget would be left to future generations of MPs to worry about. Personally, I am concerned, as I expect that it would.

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receive his notice of how much dividend he will get by the end of March. Money will be put into their hands by 1st May. The emphasis is here and now. Yes, we are helping those who have suffered in the long drought due to the economic downturn. However, such Government generosity breeds dependency and, in an election year, it breeds future expectations. For instance, why do we include overseas Singaporeans, in particular, those who have not been actively contributing to the Singapore nation since their departure from Singapore? Rather, by settling overseas, such Singaporeans have contributed to the development of their adopted countries. Sir, the more cynical will then jump to the possible linkage between granting them the right to vote as well as their inclusion in the Progress Package. This will be unfortunate, Sir.We just give them cold hard cash. The message is, "You have done well. You have been good citizens. You deserve a reward. Go and spend some." I believe the timing, being so close to the next GE, would condition Singaporeans to respond in a way similar to the Pavlovian experiment.past reserves without having to worry about balancing the next budget if the Government were to last another year. Even if he could, then the Finance Minister would have disclosed to Singaporeans that the Government has very deep pockets, which I am not sure is true. So I think it is quite clear that this term of government will end before the end of this financial year.NII to provide more affordable social and medical services to the older and poorer Singaporeans. Well, the Government has outdone this and produced this year's Progress Package. I could only add that I would urge the future Finance Minister to look into providing more affordable social and medical services for the old in the future, maybe a scheme similar to the Utilities Save, where unused allocation into this programme for medical care could be cashed. This would be much more better appreciated by Singaporeans.

Sir, weeks before the Budget announcement, there were great expectations that this year's Budget will have lots of goodies to offer, especially to individual Singaporeans. Nonetheless, I was still pleasantly surprised by the Government's unprecedented generosity when the Budget was actually announced. The "special transfers" reached an astounding $2.6 billion. More significantly, the projected budget deficit of $2.86 billion for 2006 is said to be the largest budget deficit in at least 20 years.

Sir, the $500 million ComCare Endowment Fund and the over $600 million of top-ups and rebates, announced at PM Lee's first Budget Statement last year, was the first substantial and very tangible expression of the present Government's commitment to help needy Singaporeans. This year's Budget is even more heavily skewed towards social objectives and should leave no one in doubt of the Government's commitment to help vulnerable Singaporeans, especially the low skilled and low wage workers, suffering the painful effects of globalisation.

Sir, this is a Budget where the heart and the head beat with wonderful symmetry. I am so delighted that almost all the recommendations made by the various committees have been accepted and, in many instances, enhanced. It reinforces the hallmark of PM Lee's leadership, which is to be an inclusive and consultative Government that listens to and, more importantly, acts on feedback.

Adapting from one of Jack Neo's memorable movie titles, the two areas of concern are: (1) Jobs No Enough; and (2) Help No Enough.

Jobs No Enough

Sir, as expected, the Workfare Bonus has been warmly received by low wage workers who qualify for it. The Workfare concept, which is a key feature of this year's Budget, seeks to ensure that all who can work will find meaningful jobs and earn adequate wages to support their families. The success of Workfare hinges on the success of our efforts to, firstly, create, reclaim and redesign jobs for those able and willing to work, and, secondly, to ensure that workers upgrade their skills so that they can earn more.

Sir, one key concern therefore is whether we would, in fact, be able to find sufficient jobs for all who are able and willing to work as well as better paying jobs for them to upgrade to. For instance, how do we provide for housewives who are nudged by the Workfare concept to re-enter the workforce to supplement their household income? What about the elderly who have passed their retirement age but who desire to work and/or need to work to support themselves and their families?

But - there are always "buts" in life - there are two areas of concern that linger. Actually, this Budget is so well crafted and comprehensive that I am hard put to come up with the customary three points to highlight.

I envisage that there might be an increase in the number of such job applicants, but I fear that many of them might be disappointed, as finding suitable work for these job seekers and/or retraining them in order to help them find suitable jobs would take time, and lots of time.

Workfare is not a new concept. It was started in the US and has been adopted by countries such as Canada and the UK in various forms. A major criticism of Workfare is that while it is supposed to help people under this programme get "real" jobs, jobs not financed by welfare, in reality, there are not enough of such jobs to go round.

This situation could be aggravated during an economic downswing when jobs are cut. Given the volatility of economic cycles nowadays, retrenchment is likely to be a constant refrain. So, where do we find enough of such jobs on a sustained basis especially during an economic downturn when the less educated and skilled would be the most vulnerable to retrenchment?

In Singapore, much has been done by WDA and NTUC to reclaim, redesign and/or re-create jobs by giving low end jobs a makeover under the Job Recreation Programme (JRP) launched last year. While good progress has been reported in sectors like landscaping, security, cleaning and healthcare with 7,200 jobs targeted for re-creation last year and 4,600 job seekers matched, the process is painfully slow and unemployment and skills are in a frequent state of mismatch especially for the lower skilled, less educated and older workers.

The number of jobs recreated pales in comparison with the estimated 60,700 unemployed Singaporeans and PRs as at December last year, even though not all the 60,700 unemployed are older and less skilled workers. The Government had also previously set aside $10 million to redesign jobs for about 5% of the estimated 300,000 low wage workers. But this still leaves a gaping 95% unattended to.

PM Lee has announced in his Budget statement that WDA and NTUC will be given $40 million over three years to ramp

For Workfare to work - excuse the pun - we therefore need to more aggressively explore ways to create more jobs for this group of job seekers as well as ameliorate the current skills and job mismatch through skills upgrading and retraining.

Three areas which we could consider in our job recreation efforts are:

Reserving some jobs

Sir, given our very small and open economy, it will be contrary to our strongly held belief in the efficiency of markets for us to distort the labour market by safeguarding jobs for locals. Notwithstanding this, we could still review our foreign worker ratio for various industries and identify certain jobs in these industries which are more amenable to locals and tweak the foreign worker ratio as well as expand the scope of these jobs to cater to at least a higher percentage of locals.

For instance, I once met a resident who was a former painter who felt

Redefining "jobs"

We should also rethink some policies that hinder our drive to create more jobs and opportunities for the unemployed and low income. For instance, instead of tendering out the hawker and school canteen stalls or rent them to anyone that comes along, the Government could stipulate that a certain percentage of these stalls should be allocated to our unemployed or low income workers. NEA is already issuing some street hawker licence to the unemployed as well as low income households but there are few of such licences available.

WDA, the CDCs or other self-help groups could provide training to such unemployed people to create a pool of stallholders who are versed in the art of running a small food business and who can be matched with these stall openings. The CDCs and MPs at the MPS regularly receive many requests from our unemployed and needy for such stalls so that they can become financially independent again, yet there are hardly any such stalls available.

Role of the Government

The Government itself as the largest employer around should take the lead by re-designing jobs and adopting employment practices which will allow it to hire older workers, employ retirees as well as offer part-time work. I would like to ask

Also, what proportion of work in the Government and statutory bodies is available on flexi-time and part-time basis so that more women can join the workforce and those who wish to supplement their family's income with part-time work can do so.

Sir, I would also like to ask MINDEF what about all those retired from the army once they reach 45 years of age, what proportion has been redeployed to other jobs. Sir, I appreciate the need for a young and fighting fit army and the need to constantly groom top talent for the all-important armed services, but 46-year old national servicemen taking early retirement can surely contribute in many ways.

Help No Enough

Sir, although it has been announced that the Workfare Bonus is one-off and contingent on the economy doing well, many are already harbouring hopes that this may continue indefinitely. It takes time to redesign and upgrade skills, so in the meantime they would need assistance beyond these one-off measures. The question then arises if the Government should provide direct income support to this group of vulnerable Singaporeans in the form of a regular, sustained Workfare Bonus or even a negative income tax.

There has been some talk of a negative income tax regime such as the Earned Income Tax Credit that is now used in the US. In this case, the Government gives tax credit to people who are already working but earning

The worry is that they may breed an entitlement mentality with little incentive to upgrade oneself and get a better paying job. Moreover, such schemes may be viewed as a subsidy given to employers of low qualified jobs, giving them no incentive to re-design the jobs and pay their workers higher wages.

It is clear that the problems facing our low skilled and low wage workers are unlikely to go away anytime soon and a one-off Workfare Bonus and Progress Package, although much welcome, are only temporary pain relievers. There is also some justification for a "longer" multi-period Workfare Bonus, perhaps over two consecutive years instead of a one-off scheme (though paid over two years) to provide greater encouragement to low wage workers to remain gainfully employed.

But the inherent negative effects of an entrenched income subsidy scheme as experienced in other countries cannot be ignored. So how can we solve this dilemma? There is no ideal solution but, going forward, we should monitor the impact of the Workfare Bonus as well as other related initiatives and weigh the pros and cons carefully, before deciding if more Workfare Bonuses are warranted under future budgets.

However, on balance, I would favour a more comprehensive, yet targeted package of measures to help this group augmented by Workfare Bonus as and when our fiscal position permits. This would be much better than a recurrent direct income subsidy due to the latter's inherent perverse disincentive to work and moral hazard of breeding a crutch mentality.

"Different Strokes for Different Folks"

An oft-cited criticism of our present social assistance regime is that there are simply too many, perhaps even overlapping, help schemes available. Whilst it is useful to simplify and streamline some of the schemes, it must be remembered that there is really no one size that fits all and there is a need for a variety of schemes to help the vulnerable with different age and economic profiles.

The recent slew of MOE initiatives of extending the assistance given to students from low income families such as raising the qualifying household income ceiling for financial assistance and bursaries as well as expanding the scope of assistance to include national examination fees and miscellaneous fees and free breakfasts - whether my

Most of these are already provided ad hoc but could be given on a more sustained basis on "workfare" conditions, ie, that the beneficiaries put in effort to find a job and/or upgrade their skills. Transport subsidies, co-paid by the transport companies and the Government, which were previously given to needy families, have been very well received and ought to be resumed in some form, be it in the form of transport vouchers or travel fare card for the needy.

Sir, I note that nothing has been mentioned in this Budget about costs of healthcare which Singaporeans, especially the low income and the elderly are very concerned with, despite the CPF top-ups for elderly as well as 10% of the Workfare Bonus going into the Medisave account. These are great for old age requirements but are still not much help to the present drain on resources.

Sir, we need to deal with the problem of the inevitable increase in costs in the light of improving medical technology and our aging population profile. Allowing a wider use of Medisave such as for outpatient treatment for chronic illnesses would go a long way towards alleviating the plight of the needy who are afflicted with such illnesses.

Widening the reach

Another key principle would be to involve and mobilise the community's social support network to reach out to all in need of help with a holistic assistance

However, besides the CDCs, the grassroots and CCs, we need to rally every one in the community to help identify those in need and refer them to the CDCs or CCs so that all who need assistance would be catered for. Some elderly and uneducated may still be unaware of the help available and we need everyone in the community to be the eyes and ears of our help agencies in order to be able to deliver a holistic help package to our disadvantaged.

Prevention is better than cure

Sir, anecdotal evidence suggests that children from poor and/or dysfunctional families have a higher risk of leaving school prematurely or not doing well in school. Studies in the US have indicated that even with the same given ability, children from rich and poor families do not have equal chances of success.

Hence, I applaud the Government's initiative to invest more in the education of children from low income families to help them become school and work ready by expanding and enhancing the scope of financial assistance available to these children in the kindergarten and in the schools. The move to upgrade the

up the JRP, targeting to recreate 10,000 jobs per year. There is also the "Advantage" scheme with $30 million over two years to incentivise employers to adapt their employment practices and hire older workers and/or re-employ retiring workers. Even with this boost for JRP and the new Advantage scheme, it is likely that the number of jobs created or reclaimed is insufficient to meet the demand of job seekers and low wage earners due to mismatch of skills. This vulnerable group of job seekers may consider relief in the form of a job or a better paying job to be too slow in coming and hence become disgruntled, more so if that deprives them from being able to qualify for the Workfare Bonus that will be given this May and next May.aggrieved that his job had been taken over by foreign workers. Such measures should not significantly distort the labour market since it is only applicable to selected industries and job specifications, and productivity ought to be increased to justify the higher pay for locals. Indeed, we are already doing this to some extent in the cleaning industry, where the foreign worker ratio has been tweaked and also crane drivers in the construction industry. But more can and needs to be done.the Government what percentage of the employees who have been made redundant over the last few years due to the Government's economy drive, outsourcing and best sourcing efforts were re-deployed to other departments instead of being retrenched and of these, how many were retrained. below a certain income. The percentage given is often a percentage of their actual earnings, subject to a cap, thus rewarding those who work hard. As aptly noted by the Straits Times' Editorial dated 21st February 2006, "The problem of passing out handouts too frequently is the entitlement belief it is bound to encourage.", no matter how much the Government preaches to the contrary. Already, we are seeing an entitlement creep in some residents who unabashedly turn up repeatedly either at the MPS or CDCs to demand for financial assistance, supermarket vouchers, etc., even when they are being helped with a package of assistance such as school fee subsidy, food rations and utilities and conservancy charges on a regular basis. So how then can we provide more comprehensive, yet targeted and customised assistance to the disadvantaged workers and the needy in general? Sir, in many ways, this is already being done, especially with the recent slew of measures that have been announced by the various Ministries. However, I would like to highlight three cardinal principles that ought to underline such a programme. colleague, Dr Wang Kai Yuen, in the House agrees or not - are steps in the right direction. Other indirect income support we can give to this vulnerable segment until they attain financial independence include child care and kindergarten fee subsidy, partial payment of utilities and service and conservancy charges and transport subsidies.package. Often times, it has been noted that ours is not so much a case of insufficient help available but of its accessibility and getting it to the right people. Since the introduction of ComCare, besides the CDCs, help is now available through each constituency via the CCs and the grassroots. On average, about 70% of the cases received by my South West CDC are walk-ins, whilst the rest are referrals from the CCs and the MPs. This trend indicates that most residents know where to get help from. This is a far cry from the days when help was centralised at the MCYS.

Vocational Training Centre (VTC) and its programmes so as to allow more youths to acquire employable skills is also

Sir, while the overall dropout rate of students from our primary and secondary schools is only 2.6% of the cohort in 2005 and 3% over the previous five years, these premature school-leavers with no job ready skills are likely to add to our existing underclass earning low wages. Although it is estimated that, on average, there might only be about 1,000 students who drop out before completing secondary school every year, over time, on a cumulative basis, they could form a sizeable portion of our low-wage workers.

At the ITEs, the dropout rate is higher at about 12%. These students could also have little job ready skills. Hence, more effort must be made to further reduce the dropout rates and at the same time help these premature school-leavers to acquire useful work related skills either through the enhanced Vocational Training Centre or through the WDA's Workforce Skills Qualification System.

To further reduce the dropout rates at primary and secondary schools, we must do more to help these children cope in school. At the primary schools, more resources should be put into helping children from needy families who are unable to cope with their studies, such as extending the Learning Support Programme.

Teachers and counsellors must also work together to identify these children and help them cope. The community could also help identify and encourage low-income families to send their children to pre-school so that they will not lag behind and become demoralised and disheartened when they attend primary school.

Notwithstanding all the concerns that I have raised, this is a heartwarming

Sir, I support this generous and most enlightened Budget.

welcome to cater to those with no aptitude or interest in academic studies and are likely to drop out of school. Budget which aims to put in place sustainable solutions to ensure Singapore's continued economic viability in the face of increasing global competition. It is also a Budget designed to arrest the simmering tensions that arise from a widening income gap that could tear our social fabric apart. And I think this is really a timely comprehensive package. It is a Budget that tries to ensure that all Singaporeans march in step and progress together, with no one falling behind.

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(In Mandarin): Mr Speaker, Sir, this is a Budget-Extraordinary. The Government is giving away $2.6 billion worth of dividends to the people against the financial burden of $2.9 billion deficit, just to please the voters. The Finance Minister has not explained why it is so urgent for these giveaways that he had to run into such a huge deficit. The Government has always regarded budget deficits as "fierce floods and savage beasts" (or great scourges) and has consistently been accumulating surpluses year after year.

When there was a deficit of $1.2 billion in the 2003 Budget, the Finance Minister said in his Budget Statement that we could accept a budget deficit when the times were bad, and that the aim was to build up surpluses in good times so that we could have adequate reserves to meet unexpected needs. Now that the economy is recovering, the Government has also stressed that the economic growth is better than expected. One would have thought that the Government would automatically return to the path of accumulating surpluses. However, notwithstanding non-increase in taxes, the generosity in which the bonuses were

The media have acted in concert. In covering this year's Budget, almost no mention is made of the deficit. In contrast, when there was a $1 billion deficit in 2003, the media played it up. For example, Lianhe Zaobao then carried a headline: "Government's $1.2 billion deficit budget." On the contrary, despite this year's budget deficit being double that of 2003, the media's focus is on the dividends for everyone. The headline on the front page of Lianhe Zaobao read, "$2.6 billion Dividends for all People". Not a word was said about the deficit. Is it the social responsibility of the media? Or have our local media become the propaganda tool of the PAP Government?

I tried to interpret the implication behind the use of a deficit for bonus-sharing and the media's reaction to this Budget. In recent years, economic downturn and restructuring have caused many people to lose their jobs or suffer pay cuts, putting their families into hardship. But according to the survey conducted by the Department of Statistics, the monthly income of families in the lowest 20 percentile dropped from $933 in 1998 to $795 in 2003, but the cost of living was $1,259 - a serious shortfall. The gini coefficient, which measures the disparity between the poor and the rich, is getting worse, year by year. It is, in fact, worse than that in the United States, Europe, Japan and Korea. This is indeed worrying!

People in the lower-income group suffer most in a downturn. Yet, in an upturn, they do not benefit. Had the Government been as generous as it is today, extending a helping hand to the people when they needed it most, much of their anxieties and worries could have

The Government's impromptu gesture of dividend distribution once every five years can only provide temporary relief to the people. I would like to repeatedly remind the Government that the problem which the people are truly concerned with is the rising cost of living that they have to face every morning when they wake up.

I hope that the Government will remember that a society where the middle and lower-income people are hard pressed by the heavy burden of the cost of living cannot be a society which is vibrant and creative. This is not in keeping with our endeavour to move towards a creative and knowledge-based economy. In the 2006 Budget, revenues of statutory boards amount to $1.2 billion, and other Government fees and charges total $1.8 billion. Can the Government make a thorough review on the fees and charges affecting the people to reduce their daily living expenses?

Distributing goodies before an election and then scrapping back money from the people after the election is the usual practice of the PAP Government. The people are used to it. For example, at the last election in 2001, the Government generously gave away New Singapore Shares (NSS). After the election, GST was raised from 3% to 5%.

In 2001, when a $2.6 billion deficit arose from the giving away of New Singapore Shares, I can understand. This was because, from 1997 to 2000, despite the economy being in a bad shape and the

However, I cannot figure out how the Government could cope with the $2.9 billion deficit in this year's Budget from the surpluses accumulated from the budgets from 2002 to 2005. Yet, the Finance Minister and the Government do not seem to take the $2.9 billion deficit seriously. On the other hand, the moment the Opposition party raised the point that the Government should increase the expenditure for education and healthcare to reduce the burden on the people, the Government would issue a stern warning that this would result in deficits and even bankrupt the Government, leading to the collapse of our economy.

I believe the Government should have other sources of revenue to cope with the deficit. The Government should spell out clearly its other sources of revenue, and make them transparent and public so that the people will know how these other revenues are used to offset the deficit.

In this extraordinary Budget, if the Government, apart from the ordinary revenue and the Net Investment Income, must also use the non-direct financial revenue in order to meet the huge budget deficit, the following questions would arise: (1) Should the Government's other revenue be reflected in the budget to clearly show the Government's real income? (2) In the present format of the budget, because the Goverment's other revenue is not included even when it shows a deficit, it does not necessarily mean that the Government's expenditure exceeds its revenue. When the Government has budget surpluses, the actual surpluses can possibly be even more. Is this in keeping with the principle

given out and the huge deficit that has incurred in the FY2006 Budget surprises even the strongest supporters who have always regarded the PAP as being logical and rational.been alleviated. Many families would have avoided problems that led to broken marriages and suffering for their children. People in the middle and lower income groups silently suffered from the economic restructuring and accepted the cut in CPF contributions. They truly deserve the goodies offered to them this time round.people having to tighten their belts, the Government budget still enjoyed surpluses year after year, accumulating to approximately $15 billion, whereas the NSS shares cost the Government only $2.4 billion, just like the so-called "peanuts".of transparency? (3) On what principle can the Government use its other revenue for its deficit, in addition to the revenue in items set out in the budget? Under what circumstances can the Government use this other revenue? Or can the Government use it at its whims and fancies, or just before the election?

2.13 pm

(In Mandarin): Mr Speaker, Sir, this year's Budget, as Mr Inderjit Singh said, is a people's Budget. Dr Wang Kai Yuen also feels this is a people's Budget, but I would say that this is a workers' Budget. Of course, the workers' Budget means everybody would have a share in the goodies. I think Mr Low Thia Khiang also agreed that everyone would have a share. But in his case, he was saying that everyone would have a share in the anger. He said that since 1999, the PAP Government had been giving dividends every time when there was an election. I believe in 1999, the year when he came into Parliament, he made an issue out of this, and because of that, he came into Parliament.

According to the media at that time, he said that the Government had money, but the people had none. But now, the Government has money, so it is sharing with the people. He is angry. He said, why should the Government distribute the money to the people? This year, the Finance Minister mentioned that in 2005, the growth was very good, better than expected. I am not an analyst, but I can understand in simple English and simple arithmetic. Last year, from our investment income, we earned $2.7 billion which was much higher than expected. There was a surplus. Yes, last year, there was a surplus. So the Government is now distributing this Progress Package. But Mr Low Thia Khiang said that this

In this Budget, in the short term, we want to help the lower-income people, particularly the older workers, and we want to redesign the jobs and create new jobs for the people. This is a Budget to create job opportunities so that everybody can live happily. Mr Speaker, Sir, I would like to praise the Finance Minister for introducing this Workfare Bonus, a bonus that encourages the people to work. Now, everybody is talking of how much he or she is getting - a small ang pow, a big ang pow, or a medium-sized ang pow. Of course, those who get a big ang pow will have to work harder, and because they are older, they need to work harder. According to the newspaper report, this is a something that very few other countries can emulate. But there is also an article that claims that there is a problem here. It asked why the people who are working will get the money and those who are unemployed do not get the bonus. This is a misunderstanding by some people, including Mr Low Thia Khiang. If we were to encourage the unemployed Singaporeans to remain unemployed and enjoy the welfare, then Singapore will collapse. We want to encourage people to work. We are using cash bonus to help the older people and lower-income people.

In the past few years, many of our workers have gone through a lot of problems. They were unemployed, retrenched, had difficulty finding a job,

I do not know whether Mr Low Thia Khiang is aware of the changes in the whole global market. Is his mindset still the same as 10 years ago, three years ago or two years ago? If his mindset is stuck in the situation 10 years ago, then I think his conclusions will all be wrong. If his point of view is based on what he understood of the market three years ago, then he is partially wrong. But if he bases his understanding on the situation one year ago, then he would be better off, but still there could be some mistakes in it. Why? Because the whole world is changing. Now, the workers know a lot about the problems they are facing, while Mr Low Thia Khiang does not know about them. The important thing is that we must encourage our people to work. They must carry on working and not wait for the Government to feed them. We cannot keep on handing out bonuses to the people. We must encourage them to start working, even from a lower paid job. If they put in an effort to work, the Finance Minister would give them some kind of bonus to encourage them. That is why we have the Workfare Bonus. They

Mr Speaker, Sir, just now I mentioned that Mr Low Thia Khiang was probably not aware of the changes in the market today. In fact, the NTUC has already started the Job Redesign Scheme. The problem of structural unemployment is faced by all the countries, not just Singapore. In the United States, United Kingdom and France, they have the same problem. Last year, through our Job Redesign Scheme, we were able to create 7,200 jobs. In every constituency, we have people coming to see us at our meet-the-people sessions complaining of not being able to find a job. Maybe in Hougang, there are also people going to see their Member of Parliament for help in looking for jobs. There may or may not be, we do not know. People may not go to see Mr Low, because they do not believe that he would be able to find jobs for them.

But we all know that outsourcing has become a trend. During the 1970s, if you went to Disneyland and bought a Mickey Mouse to give to your children, when you looked at the tag, you would find that it was stated: "Made in Korea". At that time, we did not understand why we bought a Mickey Mouse in the United States, but it was made in Korea. In the 80s, if you had bought a Mickey Mouse, it was probably stated: "Made in Taiwan". We could understand that because we realised that production cost was cheaper in Taiwan. But now, more often than not, you will find your Disneyland toy being made in China, and we understand. We all know because we have lost a lot of jobs when manufacturing work was outsourced to China. We know that there is a lot of outsourcing which has become

By now, we have already created 7,200 jobs and helped 4,600 low-income workers find their jobs, and we are getting more ambitious. The Minister for Finance is giving us $46 million and we hope that every year we would be able to redesign and create 10,000 jobs. Even in the taxi industry, we have about 700 people who have found jobs there. We want to create this form of welfare for the people. It is not that the Government is avoiding giving welfare to the people. We do not believe in the welfare scheme because this will only discourage people to work and become lazy. We want our people to be hardworking.

NTUC will be celebrating its 45th Anniversary this year and our theme is "Together for a Brighter Future for All". Our emphasis is to create more jobs for our people so that more unemployed people would be able to find jobs and that the lower-income people can get better jobs and those who are 62 years old and above can carry on working so long as they can do it. So, our target is something that we can achieve, so long as we put in a concerted effort.

Just now, when Mr Low Thia Khiang spoke, he appeared to have failed to think in terms of the welfare of the workers or the perspective of the workers, despite the fact that he is from the Workers' Party. As is said in Chinese, "If the name is not correct, whatever you say cannot be justified." If you represent the Workers' Party, you must think in terms of the workers. If you do not, then you

Sir, I support this Budget.

was no good, and he had many complaints. He said that by increasing the GST from 3% to 4% and then to 5%, the Government was taking back what it had given to the people. But we have told the people, right from the beginning, that the GST would eventually go up to 4% and then 5%. Likewise, in this years' Budget, we cannot just look at the ang pows that we are receiving, we have to look at the long-term target of this Budget. and they could not last long because their income was low, they did not have much savings to survive on. They cannot survive for a long time. If they can find a job and carry on working, then there is hope that one day they will earn more, and life would be better. I think we should encourage them. We should give them some incentives for that. However, there are indeed some unemployed people who are still unable to find a job. We would like to thank the Prime Minister and Minister for Finance for this package to encourage the unemployed to try harder to find a job. There are some other people who feel that we should not be encouraging the older workers at the expenses of the younger workers. But, as we are advocating lifelong learning and lifelong working, we should encourage the older folks to work too, if they can handle it. can start from a lower-income job and gradually move on to a higher-income job. We would also encourage the employers to pay them appropriately. The employers should not say, "Well, since the Government is paying you so much, I do not have to pay you so much." "bad-source", ie, production work is not carried out properly. We want to have the "best sourcing". As Mr Low said, we do not lose our manufacturer to outsourcing. But, with the rising production cost and highly competitive market condition, no outsourcing means we will not be able to survive. are not doing the right thing. We, the PAP, represent and work for the welfare of the people. Over the years, Mr Low has made a lot of speeches according to his subjective views and not from the point of view of the workers. His famous saying was, "Whereas Government has money, the people do not." He does not understand that nowadays the workers are singing a different song. The workers now say, "Wherever it is cool, I will sit there. So, when there is money, I will go there." For the manufacturers, wherever it is cheaper, they will move their factories there and, for the investors, where there is money and profit, they will invest there. This is the world today. We want to create jobs and job opportunities for our people, and we cannot just hand out money to the people. He said that, over the years, people have been suffering. Now that we see light at the end of the tunnel, we hope we would be able to lead our people to a better future. This is a Budget that looks after the welfare of the people, so that our people will be full of confidence and work harder. Just like what is stated in our NTUC theme: "Together, we can build a better future for our workers!"

Mr Speaker, may I have your permission to clarify what the Member for Ang Mo Kio GRC has referred to my speech?

Do you want to clarify your own speech or his speech?

To clarify what he has said about my speech and his imputing of some issues which I have not mentioned in my speech at all.

Yes.

(In Mandarin): Mr Seng Han Thong mentioned that though I am from the Workers' Party, when I

He also mentioned about a Teochew song which says that, "Wherever it is cooler, I will sit there, where there is money, I will go toady", and he uses this as an analogy that workers should be more flexible in jobs and should support the Government which gave them benefits. I must say his analogy is not correct. Yes, we want jobs but there are also principles in life which we cannot compromise. We cannot just say, "Well, there is money, we will just go toady." As a people, we must have backbone; we should not promote such a mentality; otherwise, we risk sending the wrong signal to the people. This type of attitude and value are also associated with the issues of whether you would be a quitter or a stayer. I hope that Mr Seng understands the implication of what he has said and explain to clarify them.

spoke, I failed to represent the welfare of the workers and that the PAP has better represented the workers. I wonder whether the PAP is going to change its name to the "Workers' Action Party" (WAP).

(In Mandarin): Mr Speaker, Sir, the Workers' Party was named as the Workers' Party many years ago. In so far as the People's Action Party is concerned, we get into action for the people. The Workers' Party is saying a lot, but there is no action. It is just mere lip-service. In the People's Action Party, the word "people", includes everybody, including the workers. So, we do not have to change our name to the Workers' People Action Party.

I mentioned just now about this Teochew song that "wherever it is cool, people will sit there". I was just explaining the global trend. Investors will look at where the cheapest place is, and go there to produce their products. In the past, it was cheap to be in Singapore. Then they moved to Taiwan, and now mainland China is cheaper. So they go there. From

the investors' point of view, wherever it is cheaper, they will manufacture there. For the investors, if they feel that they can go there and make the most profits, they will invest there. Now, the general feeling is that China is good, so they go to China. We need to understand that. When the workers understand this, they will know that there is still opportunity in Singapore because not all outsourcing jobs go to China. We have also managed to secure a lot of jobs, like aircraft repairs and maintenance, and some high-level jobs. I think if we understand this, we will be able to help our workers. If they have the skills, they will be able to secure better jobs.

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Mr Speaker, Sir, I support the key thrust of this year's Budget, which is to build a vibrant economy where opportunities abound and an inclusive society where no one is left behind. The Budget, which provides support for strategic industries and goodies for Singaporeans, has received very positive feedback. Many Singaporeans welcome the generous handouts given to them, especially the lower-income group, elderly and NSmen. The Budget has given new hopes to many Singaporeans, both young and old.

Sir, as we progress as a nation in a competitive global environment, Singaporeans must continually gear up and adapt to changing economic conditions to survive and do well. We must be highly vigilant of changing global economic conditions and build adequate resilience in our economy and workforce to better cope with future challenges. The structural unemployment which hit Singapore several years ago has thought us to be more alert of globalisation trends and equip our workers with more employable skills.

First, expanding the economy. Sir, I support the measures to upgrade and

R&D set-ups. We must provide more incentives to encourage global and local firms to have R&D set-ups in Singapore. As land cost in Singapore is relatively higher as compared to our neighbouring countries, the Government should construct more purpose-built R&D parks, such as the Biopolis or Science Park, to lease out to R&D set-ups or companies. In addition, the Government can consider granting double tax exemption for capital and operating expenditures for R&D projects incurred by companies.

R&D talent. To be a knowledge and R&D hub, we must provide a conducive and intellectually stimulating environment to attract global research talent to Singapore. I propose that the Government provide more research scholarships and fellowships to nurture and attract both young and mature researchers to conduct research work in Singapore. In addition, I would urge the Government to provide more local research scholarships for Singaporeans to pursue a career in research fields. Today, many Singaporeans are not willing to take up research as their career, as they cannot see any prospect in the research industry. Furthermore, many fail to understand

expand our economy. We need both a strategic and broad-based economy. Looking ahead, we should focus on an innovation-driven, technology-driven and service-driven economy. Knowledge would be the key driver in an innovation-driven economy. As such, I fully support the setting up of the National Research Foundation and R&D Trust Fund. To be a magnet for global talent, we must invest more resources to make Singapore an R&D hub for global brands and services. I would like to propose three areas to focus on.

the challenges and potentials of research. We need to step up our

R&D infrastructure. Sir, I support the development of a new national broadband network to link up Singapore to the world. In today's advanced technology, we must make high-speed wireless broadband accessible to all at a lower cost. In today's Straits Times, page 4, it was reported that 29% of the respondents from a recent survey conducted by the Infocomm Development Authority highlighted that Internet access is too expensive in Singapore. This is one of the key impediments to having a high rate of Internet access to all households in Singapore. Sir, having a comprehensive IT infrastructure is necessary to spearhead our R&D efforts. Broadband wireless Internet will facilitate access to knowledge and exchange of ideas anywhere in Singapore. In this way, researchers will be able to conduct their research work more effectively and link up with their respective partners, such as businesses, Government agencies or community easily. I would urge the Government to invest in the IT infrastructure to support R&D.

Opportunities for all

Helping low-wage workers

Sir, I fully support the recommendations as put forward by the Committees on Low-wage Workers and Older Workers. As a fast aging society, Singapore faces the daunting task of keeping our elderly healthy, active and employable. At the same time, there will always be a pool of low-wage workers who will require help to keep pace with the progress of our nation. Many post-war baby boomers are badly affected by globalisation. They do not have the relevant qualifications and

Sir, I support the investment of $30 million over the next three years to help 45,000 low-wage workers attain skills under the Workforce Skills Qualification System. I commend WDA for identifying the employable skills of our future workers. But I would urge the Government to provide more support to encourage low-wage workers to learn new skills. I have two suggestions to make.

First, we must ensure that all generic skills training courses are easily accessible to low-wage workers. I would propose that WDA appoint Community Clubs or Residents' Committee Centres as training centres for their accredited generic skills courses. This will make it convenient and less costly for low-wage workers to attend such courses. In addition, I propose that we should incentivise low-wage workers to make efforts to upgrade their skills or learn multiple skills so that they will be more employable. We can adopt the Continuing Professional Development (CPD) points as awarded by professional bodies to ensure that their members upgrade themselves continually.

Low-wage workers can also clock in their skills upgrading hours and be

Sir, the only way for low-wage workers to increase their income is either to upgrade their skills and go for higher-paying jobs or take up additional jobs to supplement their income. While we continue to encourage skills upgrading amongst low-wage workers, we must also provide more opportunities for them or their family members to increase their household income. More home-based work, cottage industry or part-time jobs should be created to provide opportunities for Singaporeans, especially low-wage workers, their family members or the elderly. We should be more supportive of micro-business set-up, consultancy services or lifeskill enrichment courses. Of course, we must always be mindful that businesses do not offer just part-time employment, thus reducing full-time job vacancies.

Helping older workers and retirees

As for helping older workers and retirees, the key approach is to offer them more options to either continue working or retire meaningfully. Sir, I understand that many older workers are keen to continue working but at a slower pace. Some retirees would like to take the opportunity to work in areas where they are passionate about, such as nursing homes or voluntary welfare organisations. Besides encouraging companies to continue employing their older workers through the ADVANTAGE scheme, I would urge the Government to support

Today, many have employed foreign workers to supplement their workforce in order to deliver their services. I hope that the National Council of Social Service can also spearhead a Job Recreation Programme (JRP) for our social services sector to create jobs for the elderly. This can be in the form of full-time, part-time or flexi-work arrangements, thus offering a wider range of job options for the elderly. We can also set up a golden opportunity fund for these social organisations to create new jobs for the elderly.

Sir, many retirees are concerned about healthcare and living costs in Singapore. While the CPF savings and medical insurance will address some of these concerns, we should explore more innovative approaches to encourage Singaporeans to save for retirement. The interest rates for personal savings have been pathetic for many years and many people are at a loss as to how to save or grow their savings. The lack of financial planning knowledge amongst many Singaporeans has led to poor investment by some Singaporeans. Sir, we need to provide more guidance to help Singaporeans to save and grow their retirement funds. The MoneySense programme by MAS should be conducted more regularly to reach out to more Singaporeans, especially the heartlanders. I would urge the CPF to also reconsider its investment portfolios so as to provide a higher return for Special Account holders. We should also provide more incentives for Singaporeans to save.

Progress Package

Growth Dividend

Sir, the Progress Package is well-received by many Singaporeans. I commend the Government for coming up with the innovative Growth Dividend scheme to share the fruits of our success with Singaporeans. It is given out in cash and almost immediately. However, there is feedback with regard to the criteria for distributing the Growth Dividend. In general, Singaporeans agree with the principle that more help should be given to the needy, lower-income and elderly. However, a criteria-based method of distributing Growth Dividend does have some shortcomings. Let me cite a few examples to highlight the shortcomings of using annual value as a proxy of a person's wealth.

For example, a person who has just bought a five-room HDB flat and has not paid up his mortgage fully cannot regard the full value of his flat as his wealth. Two, an occupier of a private apartment could be staying with his or her relatives and thus do not own that apartment. And, three, multi-tier families tend to live in bigger flats and, thus, their family members will be placed at a disadvantage when computing the Growth Dividend.

Sir, as the Growth Dividend is to share the fruits of our success with all adult Singaporeans, we should provide a flat rate dividend to all Singaporeans without criteria. This approach is similar to the distribution of corporate dividend which applies equally to both major and minor shareholders. The manner of distribution will ensure that no one is left behind when sharing our fruits of success. The Government can declare a fixed amount of Growth Dividend to be distributed to all adult Singaporeans based on a quantum of budget surplus. In this way, all adult

In addition to the flat rate Growth Dividend, the Government can also come up with specific help packages for specific groups of Singaporeans needing help at that particular time. These could be low-income workers, physically handicapped persons, the elderly or middle-income families. At different times, different groups of Singaporeans may need the support of the Government to progress together. Thus, a fixed plus variable Growth Dividend package can motivate all Singaporeans and, at the same time, help specific groups of Singaporeans in need. The Growth Dividend is indeed a good gesture to recognise the contributions of all Singaporeans.

Opportunity Funds

Sir, I support the setting up of Opportunity Funds for schools to help needy students to participate in enrichment activities. This will level the playing field for all students to maximise their potential and learn useful lifeskills. To be an inclusive society, we should also pay attention to students with learning difficulties at school. We need to devise a more systematic approach to help schools identify children with learning difficulties, such as those suffering from attention deficiency disorder. Expertise is needed to help those students with learning and reading difficulties . I would propose that the Opportunity Funds should be extended to organisations which provide intervention and support programmes for children with learning difficulties at the community. These support programmes must be heavily subsidised so that parents

Sir, I support the motion.

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recruitment campaign for researchers in Singapore. It is only with the critical mass of researchers that we will be able to develop a research culture amongst our companies and research institutions.skills to take up jobs in the new economy. As a result, many are engaged in low-paying jobs, thus making it difficult for them and their families. We must do more to help this group of low-wage workers. Although the Job Recreation Programme (JRP) has helped 4,600 job-seekers to secure recreated jobs last year, many low-wage workers will have to wait for many years to benefit from this programme. Therefore, I would urge the Prime Minister and Finance Minister to increase the $40 million allocated to JRP to further expedite the JRP programme. The Job Recreation Programme must not only help the existing low-wage workers, but also keep pace with changes in the economy so as to create new high-value jobs. rewarded accordingly upon completion of the generic skills courses. The completion of skills upgrading courses can also be factored into the Workfare Bonus as performance bonus. Having identified the employable skills of our future workers, WDA must adopt a multi-pronged approach to achieve maximum outreach and take-up rates by our low-wage workers in skills upgrading. This will build resilience in our workforce and reduce our vulnerability to structural unemployment.the social services sector to create more job opportunities for older workers. Many voluntary welfare organisations, self-help groups, non-governmental organisations, societies and religious organisations offer good job opportunities for older workers. However, these organisations are usually constrained by their limited financial resources. Singaporeans will get equal recognition for their contributions to the country, irrespective of their vocations or wealth status. They can be working adults, home-makers or retirees. A flat rate Growth Dividend will also ensure that all adult Singaporeans get an equal share of the fruits of success and motivate all to rally together.can afford to send their children to address these learning problems. Sir, if we wish to invest in the next generation, we must nurture every child to his or her fullest potential so that they can be useful citizens in the future.

Mr Speaker, Sir, this year's Budget is indeed a very generous and pro-worker Budget. On behalf of the workers, I would like to thank the Prime Minister and the Government for the generosity in sharing prosperity with the people, especially the poor, the low-income earners and the elderly.

There were some people I talked to who were quite incredulous at the amounts that they would receive but they were grateful that the money would help to pay for their arrears with some leftover for future contingencies. When Government shares during times of prosperity, it makes it a lot easier to get Singaporeans to accept difficult policies in bad times as the trust is already established.

Sir, we all remember the difficult years of 2001-2003. Many workers lost their jobs, had to tighten their belts and took pay cuts. Even last year, a number of big manufacturing companies retrenched workers and thousands were affected. Older workers were particularly affected by the restructuring. Those among them who lost their jobs found it more difficult to get new ones as the reality of structural unemployment hits home. This Budget, Sir, is indeed a fitting recognition of all Singaporeans' sacrifices. It will go a long way towards helping them deal with the pain of adjustment in the labour market and, at the same time, incentivise them to stay employed and be motivated to upgrade their skills. At the same time,

Sir, this Budget is also significant in the way it aims to help Singaporeans deal with globalisation. As we all know, this debate over globalisation and its impact on workers in society is a long-drawn one and is not over yet. My meetings at the ILO are never complete without someone, usually trade unionists, criticising globalisation and its ill effects on the workers and the poor. Needless to say, championing globalisation are usually employers, with some governments oscillating between the two views. Globalisation creates winners and losers not only between countries, but also within countries. In Singapore, we have seen how the salary of our bottom 20th percentile has stagnated. Globally, the same grim picture has emerged. According to the ILO, in 1960, the income gap between the wealthiest fifth of the world's population and the poorest fifth was 30 to 1. By 1999, it was 74 to 1. In 1995, average per capita GDP in the richest 20 countries was 37 times the average in the poorest 20 - a gap that has doubled in the past 40 years.

Often, Sir, the debate over globalisation is stuck in an ideological quagmire with neither side being able to see beyond their own limited sphere. This debate is also important in Singapore, although it has not been as intense nor are we stuck in ideological battles. But we too need to understand what are the forces that shape globalisation and plan strategies to help create more winners rather than losers. For this to happen, one thing is clear - the Government plays a crucial role in ensuring a fair and inclusive globalisation

With this Budget, Sir, our Government is sending out a very strong signal. Our Government will not allow the weakest and most vulnerable members of our society to bear the brunt of globalisation, a pattern that we see repeated in many countries, and which is building up a lot of resentment against globalisation.

Yes, we must continue to restructure and change in order to maximise the opportunities that come along. But we can also do much more to help all Singaporeans benefit instead of leaving this to market forces alone. Jeffrey Sachs, an economist, argued in his book The End of Poverty that, "when the pre-conditions of basic infrastructure (roads, power and ports) and human capital (health and education) are in place, markets are powerful engines of development. Without those pre-conditions markets can cruelly bypass large parts of the world, leaving them impoverished and suffering without respite. Collective action, through effective government provision of health, education, infrastructure underpins economic success." Markets alone, Sir, without strong and active labour market policies, cannot correct the imbalance in progress and income that comes about because of globalisation. In Singapore,

Hence, Sir, this Budget is significant as it will help to create decent jobs where our low income Singaporeans can earn enough to feed their family. At the same time, there are also measures to ensure a better future for their children. A sustained effort is needed so that our lower income workers and needy and poor can continue to have hope and see a future for themselves. If we fail to address their concerns, Sir, this will result in social tension and, in the long run, everyone will lose. I am glad that our Government is putting in place systems and structures to help our unemployed, low wage workers and older Singaporeans own a stake in our society and curve a future for themselves.

Sir, while I understand that a lot of attention has been focused on the immediate benefits to be gained from this Budget, such as the Workfare Bonus and Growth Dividends, I also urge all Singaporeans to focus on the long-term benefits as well. The substantial funds allocated to the Job Redesign Programme, the ADVANTAGE scheme and the Lifelong Learning Fund will greatly help NTUC and WDA in our efforts to recreate jobs for low-skilled and older workers and to retrain them. Through the JRP, we have already helped create 7,200 jobs and place 4,600 workers in better paying jobs in 16 sectors, and we aim to create 10,000 such jobs a year. In this way, we help to create decent jobs and make it possible for everyone to level up. In the long term, this is the most tangible and sustainable assistance that we can render to low-wage workers. Now that these

I must say, Sir, that I am a bit concerned when I read in the papers about the different ways in which some Singaporeans intend to spend their Growth Dividends. There was even one person who was quoted as saying that he wanted to use it to buy 4-D. I think that it is better to save this money to be used for a rainy day. As jobs are now more volatile and uncertain, it is possible for us to lose our jobs at anytime. In such a case, this amount will come in handy to tide us over until we get a new job and will help to pay for our daily needs such as utilities, service and conservancy charges and costs for children's schooling as well as other daily needs. I hope, Sir, that Singaporeans will spend their money wisely.

Let me now come to some specific aspects of the Budget.

Sir, I have received a lot of feedback that Singaporeans are somewhat confused about the Progress Package. One university student I spoke to did not know that he would be getting $800, which is more than enough to offset three years of university fee increases. Some thought that they will not get anything since they are not working as they have mixed up the Workfare Bonus with the Growth Dividends. The elderly are worried that they may miss out as they did not know how to register to get the money on 1st May. So, I think there is a need for MOF to explain more clearly and also to reach out to Singaporeans who need help to explain and assist them. Another group that may need special help are those who are confined in institutions, such as those in our penal institutions, nursing homes or hospitals, especially IMH. The MOF should also work with GROs, as well as tap the resources of the self-help groups

Sir, on the Workfare Bonus, I have also received some feedback from Singaporeans who work as temporary, casual or part-time workers. They are unsure whether they can claim the Workfare Bonus because they are not clear on how to interpret the requirement that they must have worked for a period of at least six months continuously. For some of them, although they have worked for six months they may be working only sporadically when work is available. For example, if a worker works for six months but only for a few days in each month depending on the availability of work, will he qualify for the bonus? Or, for instance, he had worked continuously for the first six months of 2005, but later lost his job and is now unemployed, will he also qualify? Perhaps a clearer explanation from MOF of these issues would be helpful.

Sir, I have also received some feedback on the housing grant. Some are not clear on the requirement that they have to work continuously for two years before they qualify for the grant. A question asked was whether they would qualify for the grant if they had been working for some time but lost their jobs because of retrenchment before fulfilling the two-year requirement. In such a case, would they have to start from zero-base and count again once they start working in a new job? Would there be some flexibility, they want to know, to deal with genuine cases where the interruption in the work is due to reasons beyond their control?

Sir, in response to a question which I had raised in Parliament, which is also

Sir, in his Budget Statement, the Prime Minister had mentioned about the enhanced childcare subsidies for the first and second child. I welcome this benefit as it will certainly help low-income families to improve their finances as mothers can now go out to work. However, Sir, some mothers have lamented that restricting this benefit only to the first and second child is too rigid. They have asked that the Government consider extending the higher subsidy to the other children in the low-income family, or at least to the third child. If the rationale, Sir, is to encourage self-reliance and make it possible for mothers from low-income families to go back to work, then it really makes sense to extend this higher subsidy to more children, and not just the first two. This flexibility, Sir, is necessary, in my view, to prevent children from low-income families from becoming low-income workers of the future, costing the Government much more to retrain them and to provide social assistance. I hope that the Government will consider this request.

Sir, let me now touch on the headcount freeze for three years and the Manpower Management Framework (MMF). The Manpower Management Framework, Sir, was introduced in 2004 and was meant to apply for three years. Under the MMF, Ministries and statutory boards are required to reduce their headcount by 3% per year. The MMF had caused some concern among public sector employees. Many were worried that this policy meant that they would lose their

Sir, in last year's Budget, Prime Minister had mentioned that about 20% of the non-core functions in the public sector will be market tested and, if found suitable, best sourced. Following this, we have seen a number of best sourcing initiatives carried out in the public sector. The argument in support of best sourcing is for the public sector to avoid doing things which are not core to their work and for which they do not have the expertise or economies of scale. In such situations, it is better for the public sector to buy such services from the private service providers. However, Sir, generally

Sir, the job creation focus of this Budget cannot be overlooked. By ensuring that Singapore continues to remain economically sound and competitive, our workers can continue to look forward to new and better jobs being created and, therefore, assured of a secure future. process. Those who argue that governments have no role to play and should leave it to the market to sort itself out are wrong. In fact, evidence shows that when governments take a strong and interventionist role in helping the most vulnerable and needy in society, the benefits of globalisation can be better harnessed for the good of everyone. So crucial is the need to ensure a more inclusive and humane globalisation process that in 2002, the ILO set up a Commission on the Social Dimensions of Globalisation which made many recommendations on how countries could ensure a fairer globalisation with benefits spread out more evenly. we can show that it is possible to build a fair and inclusive globalisation process. As the World Commission on the Social Dimension of Globalisation argued, "seen through the eyes of the vast majority of women and men, globalisation has not met their simple and legitimate aspirations for decent jobs and a better future for their children."funds are available, I hope that employers will take advantage of them to train their workers, especially the SMEs, which do not train their workers as much.and VWOs, to help reach out to these groups. The Ministry could also rope in employers to help in explaining to their workers, just as unions will do our part in reaching out to our members.covered under the Low Wage Workers Committee's Report, the Minister for MCYS promised to look into enhancing the social assistance programme to support women to remain or re-enter the labour market. I hope that, in the course of this debate, we would get more details of the enhanced KiFAS, childcare and student care subsidies that low-income families will be able to enjoy. jobs if normal attrition is insufficient to make up for the 3%. There was also the problem of how the MMF policy relates to the current policy of raising the effective retirement age. With the MMF in place, there is no incentive to employ anyone beyond 62 years, for if a public sector agency does so, it cannot reduce its headcount. Also, where there are new services or when existing services are expanded, it is difficult for public sector agencies to increase headcounts as they would then be contravening the MMF. Sir, I was hoping that the MMF would be discontinued, so that we will not see a conflict in the current policy to employ more older workers and extend older workers' employment and the MMF. Since this policy will continue for one more year, I would like to seek a clarification from the Prime Minister whether this would inhibit the ability of public sector agencies to recruit and extend the employment of older workers. Also, I note that from FY07 onwards, there will be a headcount freeze for three years. Although this is an improvement over the MMF, I would be grateful if the Prime Minister could also clarify on the meaning and impact of this policy. Specifically, how will this affect recruitment in the public sector and the policy to engage older workers and re-employ those who have reached 62 years of age?the use of outsourcing in Singapore has caused some concern. In some cases, or in most cases, I may add, once a decision is taken to outsource, tenders will be called

and contracts awarded according to the criteria set, one of which would be the pricing of the services offered. Because of the practice of awarding the contract to the lowest tender, contractors try to outbid each other in order to secure the contract.

The service provider is then measured strictly by the outcome or output that is defined. Usually, there will be nothing in the contract between the agency using the contractor/service providers on the workers' welfare - that they should be treated decently, the contractor should comply with labour laws, cover the employees with adequate insurance protection, pay CPF and decent wages and pay them on time. In a few cases, where this is stipulated in the contract, there is no follow-up mechanism to ensure compliance. As a result, contract workers employed under such arrangements are worse off compared to permanent workers. In such a situation, Sir, best sourcing can become cheap sourcing.

I think it is possible for us to change this situation, so that the outcome will be win-win for everyone. Employers can make more effective use of their resources, especially they can have greater flexibility in managing their manpower cost depending on their needs. At the same time, workers are paid decent wages and enjoy the minimum benefits stipulated by labour laws. People see the public sector as a model employer and expect it to uphold high HR standards, and they are not wrong, as having dealt with both the public and private sectors extensively, I can vouch for the public sector's fair and humane treatment of staff. Hence, on the issue of outsourcing or best sourcing, I would like to ask the Prime Minister and Minister for Finance what is the policy in the public

Sir, I have spoken on previous occasions on the need to reduce the maid levy for singles taking care of sick relatives and parents. Our population is ageing very rapidly and the elderly suffer more from medical problems and other disabilities. We want to encourage families to take care of their elderly, as we feel that the elderly will fare better in a home environment than if they were to be put in institutional care. This is also one of the key thrusts of the Committee on Ageing Issues which recently made known its recommendations. Ageing issues are becoming predominantly women's issues, as women live longer, have less savings and need more medical care. Women also make up a high proportion of singles that take care of their sickly parents or other disabled relatives. So, they suffer a double whammy. With such responsibilities, women usually find it difficult to get married and have a life of their own - something which the Government is trying very hard to promote- yet, at the same time, they also find not much support from policies to help them take care of their aged parents. I hope that the Ministry of Finance can also review this policy and allow singles, who take care of their elderly sick parents or other incapacitated family members, to pay a lower maid levy.

Sir, as GPC Chair for Health, I am very pleased with the Medisave top-ups of between $100 and $800 for those above 50 years. Elderly Singaporeans, especially

Let me conclude, Sir, by pointing out one aspect of the Budget that many have missed, and that is the extensive consultations that took place with many Singaporean stakeholders before these Budget measures were announced. Many of the Budget measures arose from the recommendations of three Committees, ie, the Low Wage Workers Committee, which recommended the six key measures to help low-wage workers level up, including the Workfare Bonus and the housing grants; the Employability of Older Workers Committee, which recommended setting aside $70 million for the Job Recreation Programme and the ADVANTAGE Scheme; and the Committee on Ageing issues which recommended the Medisave top-ups. Sir, these Committees were represented by a cross-section of the society, and workers had a strong voice. This is again something unique to Singapore. Globalisation may have diminished the voice of workers in many countries, leading to a sense of marginalisation and loss. But, in Singapore, workers' voice remains strong and powerful, as we were fully represented on these Committees and actively participated in contributing our ideas and in representing workers' interests.

Sir, I applaud the Government for this farsighted, socially inclusive and humane Budget. I fully support this Budget.

sector when it outsources. Are there sufficient safeguards included in the contracts to the vendors or service providers to ensure that they do not exploit the workers and fully comply with labour laws and pay CPF? What follow-up action is in place to ensure such compliance?those above 65 years, have low Medisave savings but require more medical attention. I hope that such top-ups will be a regular feature in future Budget years if there is a surplus.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended at

3.06 pm until 3.30 pm.

Sitting resumed at 3.30 pm

Debate resumed.

Mr Speaker, Sir, I rise to support the motion standing in the name of the Prime Minister and Minister for Finance.

Over the last two to three years, Members of this House have consistently brought to the attention of the Government three groups of Singaporeans hardest hit by the economy: (i) the low-skilled/income workers; (ii) the older workers; and (iii) the professionals, managers, executives and technicians (PMET). They belong to the 40 to 49 age group. So, has the Budget helped ease the pain of these Singaporeans? The answer is a definite yes. Now, at my meet-the-people sessions (MPS), I can confidently tell a low-wage worker that since he works regularly for the past six months and he earns $1,500 or less per month, he will be receiving Workfare Bonuses ranging from $150 to $1,200 in two portions. If he comes from the lower-income household, he will be helped with Utilities Save rebates, ranging from $60 to $200, and also continues to get rebates of up to four months of service and conservancy charges and up to three months of rent. On top of that, he, like all other Singaporeans, will get Growth Dividends, ranging from $200 to $800. And with the work support programme, his family will be helped with childcare and student care assistance, so that he and his wife can go out and work. Then there is the education assistance scheme to further ease his anxiety and financial woes over his children's education. All this and the ComCare Fund are very generous assistance programmes. Even this low-income group also has special CPF housing grant. So, it is very, very generous.

At my MPS now, for an older worker, when he comes to see me, I can tell him that he can get help through a scheme to help companies hire and re-employ him and his older worker friends. He will also benefit from the recreation of 10,000 jobs a year under the Enhanced Job Recreation Programme. This is the $40 million programme over three years. And if he is an elderly person, he will get CPF top-ups to meet his retirement and healthcare needs.

Therefore, it is a good Budget. It spells out clearly the Government's intention of sharing wealth with each and every Singaporean and more for those who really need it. It also shows that the Government knows and understands the urgency and need to allay their anxiety and ease their financial hardship. In fact, the Prime Minister and Finance Minister said, and I quote, "this Budget aims to build a vibrant economy where opportunities abound, and an inclusive society where no one is left behind."

I see that if we do not do something for those who are likely to be left behind, it will lead to the formation of an underclass group. They are usually 40 years and older and their income shrank 3.2% a year from 1998 to 2003. This data is gathered from the Household Expenditure Survey 2002-2003. This group spreads across all races but the Malay community is hardest hit, as can be seen at our meet-the-people session. It is a vicious cycle - no job, no money, no hope to come out of the poverty trap. So this Budget and the Prime Minister's assurance that no one will be left behind are timely, and we at the ground will support the various programmes to uplift their lives and hope that their children will be better educated and have more opportunities to have better jobs and income.

I support the upgrading and restructuring of the economy. We must

My hope is less red tape for drawing on this fund. And I also see a possible issue arising from this research fund, ie, who has ownership of intellectual property should the product become commercialised? For example, if the research fund funds a research company to develop a test kit for avian flu and is successfully commercialised, who owns this intellectual property? Does it belong to the provider, or is it shared between the provider and also the researcher? I think this has to be worked out. It should be a win-win arrangement or else not many will want to draw on this funding.

We must try to capture a slice of the Islamic financial business which is booming. So, it is a good move to promote Islamic financing activities by harmonising the tax treatment of Shariah compliant financial products with that of conventional financial products. It is up to the banks and insurance companies here to now take the cue from the Government - create, market and

The challenge that Singapore has to face is an affluent and rapidly ageing society. An affluent modern society has many high expectations and needs. Better educated, better informed, more knowledgeable, and coupled with the rapidly changing fast telecommunication have brought about mindset changes with regard to work, culture and behaviour. In the past, if you changed jobs too many times, you were a job-hopper. And I remember in the old House, and Mr Chiam and I were in that House, there was a big debate condemning job-hoppers. But, today, this moving from job to job is called "upgrading", "improving", and is very welcomed. Also, it looks good on your CV if you list your past job experiences in your next job application. There is also a big shift in thinking of how to do business. So, even in the Government, we have privatised or corporatised our waste and garbage disposal, our power and water, and many others.

Again, in the past, when I brought up the issue of privatising refuse disposal, ENV came up with reasons why it could not be done, including it was the Government's responsibility. But, today, things have changed. Today, involving public-private partnership is becoming a norm. It is called best sourcing, and I think Mdm Halimah has spoken at great length about best sourcing. Now, I will borrow what the Budget has defined "best sourcing", which is, "best sourcing is about choosing the provider who can best do a job, namely, to do it efficiently and economically." So you see HDB and URA outsourced their car parks and enforcement functions to private providers in August 2005. Then they have also many non-strategic areas like facilities

But these business changes are not bad. It shows that there is different thinking, different view on a particular business model and, therefore, I accept it. However, some Singaporeans think differently on some fundamental issues, like race and religion, especially among young Singaporeans, and the Internet is the battlefield. They have no history of the past and no emotional attachment to such issues. This is a change I am concerned about. And I am glad that the Police took quick action. Singaporeans must be free to live with one another, irrespective of their race and religion. It has been a cornerstone of success and pride. We legislated in the House on the right of each race to practise their religion. We had a big debate in the old House on this subject.

We legislated the Group Representation Constituency to ensure minority representation in the House, so that Malays, Indians and other minorities will be represented. We had a long debate. I think Mr Chiam can testify to that. Therefore, it would be wrong and unwise to challenge the GRC concept. I met many other MPs abroad and they were impressed with this idea of getting the minorities into Parliament. But they had no political will to entrench it in their Parliament. But we did it because we believe in it. If young Singaporeans challenge the number of MPs that makes up a GRC, then it is legitimate, and we can challenge that. But to totally remove the GRC is not wise and will open up communal politics.

The other challenge facing Singapore is our aging population. Many issues on the old have been discussed and debated in this House. Calls and recommendations have been made to improve the environment and a barrier-free one. Jobs have been redesigned and recreated to suit the old and the not-so-old, and the CPF top-ups have been given. However, I would still like to cover three grounds. One is the upgrading in old estates. It is obvious that old estates need upgrading, especially the lifts, because these people living there are old. We should relook the present package for lift upgrading in such old estates. Their children have moved out, their income depends on their children and they have not much savings because they belong to the old generation. They need help to move about and they need the lifts to get out of their homes or they will become house-bound. Yet, they have been asked to contribute to this lift upgrading. So I am actually asking the Government to now relook at this. Do not have one formula fits all. Surely, for all these old housing estates where lift upgrading is needed, we should give them. It is no longer a luxury, it is a need. So I hope that the Government will look into this and maybe give free to all these old estates.

While I was trying to source some funding for the lift upgrading, I came across an article in the New Paper which was very interesting reading, but I am not so sure how truthful it is. It concerns capital receipts that were not in our Budget statement. According to what the paper wrote, these capital receipts, which refer to the sale of land and goods, have a total amount of about $13-over billion. To me, I am concerned how come this sum is not in our Budget statement, and I am sure there must be some error here. So I hope the Minister for Finance will correct this. If not, I will be the first to queue up for this fund for the upgrading of the lifts in my old estates.

The other thing is we must treat old Singaporeans not as isolated groups. We must get them into the society. So what I did was I tried to rebuild an old daycare centre into what I thought would be a modern daycare centre so that it would allow old folks to go there and have some daycare service,

become a knowledge hub. So the setting up of an R&D Trust Fund under the National Research Foundation is most welcome. This fund will fill a huge funding gap for R&D in Singapore. We have no research culture. Our strengths have been in trading, finance and services. This fund will come in handy to help and encourage research. Our education system is now moving towards a more innovative, creative and research base. So when these students graduate, the working environment to meet their drive and passion for research must be there. It is very important - the working environment must be there for them - or they will move elsewhere. This fund will provide the seed money for local companies to think of R&D and we hope they develop many innovation-centred products of world recognition and acceptance.distribute such products. And I know they can. This morning, NTUC Income has already responded, and it is good. This will help us move into the Middle East which is now a fast-growing area. management, IT, security, audit, document management, call centres and library services - all have also been sourced out. Even the water desalination plant, a new water plant, will enjoy this PPP status. But change ownership has its new problems. I think Mdm Halimah has put it very clearly about the problems that were encountered with best sourcing. So there is no point for me to go through it again.

at the same time meet older well Singaporeans and even young people. This needs a total mindset change. I got my young to do it, and they did a marvellous job. So that, to me, should be what we call a modern daycare centre or social care centre for everybody - an inter-generation daycare centre.

But when you make all these changes, you realise you lose your funding. You cannot get the funding because MOH says, "I am sorry. This doesn't comply with the requirements of a daycare centre." So there goes one of my funds. Then MCYS says, "Sorry, you also don't qualify because you don't fit into our funding." So at the end, I am poorer. So I am asking the Minister for Finance, "Please help me!"

Third, I think we have to consider the setting up - and this is concerning old age again - a gerontology faculty in either the polytechnic or university. There was a report being circulated, I think, among MPs and also to the Prime Minister and Minister for Finance. I think it is a very good report because it will give you an insight of how old people should be managed. We cannot assume that we all know. You will be surprised that we do not know much about the old. With the setting up of a centre like this, we can train the caregivers. Many of us do not understand that the caregivers are very important in managing the old. I am hoping that, with the setting up of this centre, awareness will be created and, more importantly, having a core knowledge of the subject.

Finally, I think it is important for Singaporeans to know that, over the years 2001 to 2006, there were always some assistance measures to help the lower income and Singaporeans at large to cope with the economic restructuring and poor economic conditions, and also to meet the retirement and healthcare needs. So if you look back to FY 2001, Singaporeans received New Singapore Shares. In 2002 to 2004, there were the Economic Restructuring Shares, and this amount was very high, much higher than what we got for this Progress Package. This year, 2006, the Growth Dividends will be given to all adult Singaporeans; even CPF top-ups, tiered in favour of the elderly, were given from 2004 to 2006. There will also be the 40th Anniversary NS bonus; the Workfare Bonus to help low-wage workers; Utilities Save, S&CC and rental rebates, tiered again in favour of lower-income households from 2001 to 2006. Including other reductions like personal income tax, increases in tax relief and exemptions, the Government has over this period 2001 to 2006 distributed a total of $10.5 billion. It is not a small sum. We have always given back to the people whenever we have created wealth, and we will continue to do.

It is a generous, appreciative and fair way of rewarding Singaporeans who have supported us through thick and thin. Barring Avian flu, crazy oil prices and unforeseen circumstances, I am sure we can still continue to deliver all these, what we call, special transfers over the coming years.

3.50 pm

Mr Speaker, Sir, Mr Low Thia Khiang is not here. I was listening to him very intensely and I found

So over the last 4 1/2 years, I think this Government has done reasonably well. It has enough surplus, grown organically over the last 4 1/2 years, and the time has come to share that amount with the people. I am not a Teochew. Years ago, Mr Low Thia Khiang said, chen hu woo reed, lan men boh reed. I think you will find it difficult to repeat this line now because now, chen hu woo reed, lan men

But for today's Budget debate, Sir, I would like to focus on the main thing which has been occupying my mind for some time, that is, the low-income aged, particularly the aged. I like to tell this story which is a little story. Many years ago, when I was turning 40s, my hair began to turn grey which is not uncommon. So I went to my regular barber and she sensed an economic opportunity. She said, "Why don't you dye your hair?" I said, "No. I am past 40." I was 42. I said, "No. I don't want to dye my hair because turning grey is quite normal." She said, "No. You are wrong. In my business, all the men who come here when they turn grey, they dye their hair." I said, "Why?" She said in Mandarin, "Ni bu zhi dao, dang ni you bai fa, she hui dang ni shi lao ren, shi lao ren ne, ni jiu mian lin cai tui le." In other words, she is saying that the moment you turn grey, society thinks you have aged. As you age, you become less useful, you will be in the hit list for retrenchment. Of course, when she said this, I knew her agenda because cutting my hair is about $8-$10, and dyeing the hair is $30. She makes more money dyeing man's hair than cutting man's hair. What she told me had a profound impact on me in later years because when I look around, it is true there are very few grey hair people in Singapore. Perhaps, she has an inside information. She is in the profession.

There is this perception that when you grow old, when you grey, you are less useful to the society. In fact, the year 2006 is a landmark year because, officially, the baby boomers turn 60.

In fact, I was just reading the Time magazine about one week ago. It says, "How to sharpen your mind?". I was also reading in Parliament this article on "How to manage an ageing workforce?" Studies after studies have shown that as we grow older, our physical dexterity deteriorates. If you are a typist, you will type slower. If you are a speed reader, you will read slower. In other words, we cannot run faster, jump higher or throw further. We cannot take part in the Olympics. But what we can do is to become Olympic coaches or Olympic ushers. We can enter the service industry. For those who have been, let us say, in manufacturing where they depend a lot on their physical dexterity, their motoric skills, they can go into the service industry, for example, hotel industry, tourism industry, hospitality industry and healthcare industry. When you are at a certain age, you tend to, in a sense, give better service. You are less impatient, you tend to be more humane, if I may say. Whereas a young person is more impatient, wants to get things done, and in the process may trample on the customer's feet. That is I think one reason why, for example, in the service industry in Singapore, you have very young people

Many companies around the world are actually polishing up their alumni list. Toyota, in fact, the world's most advanced motorcar company in the world, soon to overtake General Motors, in terms of volume production, has specifically redesigned their manufacturing processes for older people, people whom they take above 60 years old. BMW, for example, has just opened a plant in Germany where the policy is to employ people over 45 years old. For them, it is a policy borne on necessity. But they also recognise that if you give encouragement to the older people and harness their other skills, so to speak, not purely their motoring skills, they can be as productive, if not more productive, than the younger people. This is something that we need to move forward. How do we move forward? That is the thing. I read in the papers that the Government is thinking of legislation. That is one way. But experience from the United States and Europe do not seem to point that way. In America, there is no Act to legislate retirement. But they have an Act called the America's Age Discrimination in Employment Act which is basically you cannot discriminate against older persons. So if an old person comes to see you, first of all, you are not allowed to put the age there, or whether

In contrast to that, you find that a small country like Denmark, for example, has the most flexible employment policy. It hires and fires people almost at will. But it has the highest employment rate in the whole of EU, which is quite profound, and the wages in Denmark are very high, one of the highest in Europe. So you have these two countries to compare, the United States which tries to encourage employing older people through various legislative directives and Denmark where it is almost a free for all. You will find that the employment rate in Denmark is higher than in the United States. In Singapore, as we move forward in trying to encourage the society to employ more grey-hair people, I think we must calibrate this very carefully. Yes, as it stands today, where there is no legislation, companies are truly reluctant to employ older people, that is, because the people in charge - the CEOs and the human resource manager - do not seem to be convinced

his speech puzzling because, as the Secretary-General of the Workers' Party, he does not seem to be in favour of the Government helping out the workers at this time of the year. Basically, his question to the Government was this. Last year, 2005, was a good year for the Government. How is it that in a good year, we did not register a surplus but registered a deficit, a substantial amount? He implied that we are doing it because we are looking at the election that is coming ahead and that we are actually deliberately engendering a deficit which goes against the Government's policy of creating surpluses during good times and managing a deficit during very bad times. Mr Low Thia Khiang is looking at it in a very short horizon. I cannot speak for the Government. But the way I look at it from where I sit and from where I read the papers and do my analysis is that, when you look at the Government's performance, you do not look at it from year to year. You look at it over a period of time. How long is the term of Government - four or five years - depending on when the Government decides to ask for a new mandate? In other words, do not judge me quarter by quarter, as the company CEO always says, "Judge me on a longer term." In fact, when you give a contract to a CEO, it is never quarter to quarter, nor even year by year, very rarely year by year, maybe three or five years. So at the end of three years, you ask for a mandate, "In the three years, have you grown the company? If you have, then I give you another three or five years."ah see woo reed liao. I think this is the right philosophy because if you operate on a year to year basis, bad times you squeeze the budget - no Growth Dividends, no Progress Package, no Workfare - and during good times, you suddenly splash even over a period before the fine good time, and the people will judge us over that period of time.Who are the baby boomers? These are the babies born in the years 1946, post-war, up to 1964. On 1st January this year, they clocked 60 years old. Around the world, the governments in USA, Europe and Japan especially are scratching their heads how to harness the grey power. The reason is very simple because there are a lot of grey hairs who are very productive and suddenly they are switched off. When they turn 60 or 65, depending on which country, they turn from being very useful to become totally useless. This is something that we should avoid. I think we are slightly behind the curve in that sense, but we are also onstream to becoming an older society. in the shopping centres. But they do not provide the best of service. They are not rude, but they stand around not providing service. They are there, but when help is asked for, usually they are not around. If you contrast that to departmental store assistants in the USA, Canada and Europe, they are usually grey hairs, but they give you excellent service. Sometimes, they kill you with kindness. I think we need to strike a balance between getting very young people in the service industry who do not offer very good service, but they are there. We have very old people who offer very good service but they may be slow in, let us say, counting money, carrying barang barang, or things like that.you are an Indian, Malay, Chinese, Caucasian, Black, or Hispanic. You cannot put your religion there. That is only on paper. They can go around it in many ways. The economists have found that such an Act again and again discouraged employment of older people. Because once you employ an older person, you cannot remove him or her.

that older people can be as productive as younger people. I think we have to slowly encourage them to think positively and look at the world's most advanced companies, such as BMW and Toyota, which are setting the way.

I want to also talk about the Budget today. The details have been splashed all over the papers and discussed at length in this House today. This year's Budget is a profound and seascape change, as I know it. For the first time, we are giving cash handouts. It is not a lot but it is symbolic, on top of other handouts which are kept in the CPF, in the schools through the Opportunity Funds, etc. This is

I also want to commend the NTUC for working with the Government to put this package together. I believe that without the NTUC's representation in putting forward the workers' case, the workers would not be able to benefit so substantially this year from this package. A businessman lamented to me that it is a pro-workers package and less of a pro-business package.

Overall, I think it is a package that is much welcome on the ground, not because it is just an election year, as Mr Low Thia Khiang has put it - Mr Low is not here - but I would like to remind him that every Budget is really an election budget. Every day, for an MP, is really an election day, and as the work is not done today because next month or the month after or the month after that might be an election month, but because yesterday was supposed to be an election day.

4.05 pm

something that people did not expect. They did not expect cash. They expected the CPF top-up. When my grassroots leaders asked me, "How is it that we are getting cash this year?", I told them that this is a different year and a different Prime Minister and Minister for Finance. It happens to be two-in-one, so it makes things easier. But I support this, because for the low-income people, and I have quite a lot of low-income people who are old in the rental flats. If we put money in the CPF and ask them to get the money from the CPF, it is quite an effort. What happens is that they go to their MPs and the MPs do a lot of the paperwork for them in order to get the money. This approach of directing some cash to those who need them most is very useful.

Mr Speaker, Sir, thank you for allowing me to take part in this debate on the Budget Statement for the Financial Year 1st April 2006 to 31st March 2007.

First of all, I must say this is a Budget Statement that is too good to believe and yet it is very true that all Singaporeans will in some way or another benefit from the Progress Package announced on 17th February 2006 by the Prime Minister and Minister for Finance. We are indeed speaking under happier circumstances. Why? We are talking about how much to share and how to share. But more importantly, in my view, the Budget Statement 2006 is really about "Building on our Strengths, Creating our Best Home". The Statement has further detailed the strategies and approaches to upgrade and restructure the economy in Singapore, as well as helping Singaporeans move forward together.

I am glad that while the Government is mindful of the economic performance and progress of our country, it is also paying special attention to the needs of the less fortunate people and lower-income workers.

Sir, I choose to be more focused, brief and straightforward in my presentation. Therefore, I do not think there is a need for me to go into the various key initiatives and elements as they are already contained in the Budget Statement. However, my colleagues and I in the trade unions and NTUC are fully aware that all such actions and measures are ultimately aimed at enhancing job opportunities, job creation and, better still, job recreation for us. The unemployment rate has gradually eased to 2.5% now, which reflects that the employment and re-employment schemes have been successful.

The creation of some 110,800 new jobs in 2005 is testimony of the concerted efforts of the Government and our people. For the record, to be fair, Sir, we have to acknowledge this in this

All in all, we understand the Government's good intentions to share the fruits of growth in the form of Growth Dividends. We understand its intention to reward low-wage workers for work through Workfare Bonus, and that the Government will help lower-income households with their living expenses through rebates. They will help the elderly meet retirement and healthcare needs through CPF top-ups and more.

In conclusion, the Budget Statement is not just about comprehensive but also compassionate measures to help low-wage workers adapt to the global economy and a $2.6 billion Progress Package to share budget surpluses with all Singaporeans. I believe this will no doubt instill confidence in the minds of the people and at the same time warm the hearts of everyone as well in Singapore.

Mr Speaker, Sir, I support the Budget.

4.08 pm.

House. We thank the Government for injecting more funds into these areas in this Budget. These schemes include the Job Recreation Programme for low-wage workers, the new ADVANTAGE! scheme for older workers, Workforce Skills Qualification System on training and retraining, ComCare Fund for the needy households and so on and so forth. There are, in addition, other measures to support the low-income families in the education of their children, CPF housing grants and Workfare Bonus ranging from $150 to $1,200 under the Progress Package. The list goes on.

Mr Speaker, Sir, thank you for allowing me to join in this debate.

This Budget is one that tidies up past Budget considerations and keeps its focus on the group that is most needy, as well as developing the necessary infrastructure

But no Budget speech is without its laments. One big part of our Budget is aimed at the Workfare Programme calling for workfare, not welfare. It is highly laudable, but I think it could have gone further to address the changing employment landscape in the new ICT era. Rewards based on the current workforce infrastructure may be short-lived. What is needed is a new paradigm, a framework that fits in the ICT revolution. Of course, we cannot reformulate our institutional systems overnight, nor will it be without pain. However, unless efforts to update the current infrastructure to address the changing demography and the knowledge environment are quickly put in place, I think we may risk redundancy.

Let me elaborate. Much of the current work reward and life infrastructures were developed based on the industrial revolution model which rewards work according to the clock-in-clock-out time cards and is quite location-dependent. During the period when machinery and automation were all the rage, there was even a shift in the economic value from labour to machines. The ICT revolution reversed this equation. The tools introduced by ICT are making work increasingly time and location-independent. The knowledge worker increasingly works in an environment in which work, play and life become a continuum and not compartments. Fostering talent is not only a question of material rewards but, to a great deal, a

Please allow me to elaborate on a few of my observations.

A larger share of the workforce will not define their future in terms of a single employer. Organisations will emerge to give them the extra labour market security, and that could include manpower, trade unions and employer organisations, which could be in fashion as 21st century guilds. Itinerant workers will sell their reputation and what they know or can learn to the labour market. The guilds, hopefully, will provide quality assurance and learning needs to itinerant workers. Job quality will bifurcate. A high quality of life, higher locational choices, greater potential to balance market hours of work with non-market hours will also occur. These changes will in fact favour the inclusion of the vulnerable, which includes the mobility-disabled, women with family responsibilities, the aging population, etc. The digital transactions will bypass inappropriate policy at the speed of light. Entire regulatory environments, if inappropriate, will be marooned. Government labour market institutions like trade unions will have to redefine their services and functions and how they deliver them or risk being irrelevant. Therefore, a passive policy is a ticket to marginalisation.

At the level of the enterprise, the operational tools that ICT has made in principle, made it possible to do things differently. Management practices in the way we organise work, however, are, to a

Against the changes in the ICT revolution are the changing demography and workforce. Given our aging population, a particular concern is how we can engage and productively optimise this growing human resource. Do we recognise that at no time in history have we had such an educated and invested aging workforce that is rich in knowledge, experience and network? In business terms, are they not one of our greatest financial assets? If a machine reaches a notional lifetime useability but is well-oiled and still working fine, would we retire it unwittingly? If not, why do we put a notional lifetime use-by date on our aging workforce and an entire labour infrastructure and regulation to support it? We need to relook at our employment landscape and infrastructure and find ways to unlock the value of our aging

It is also noteworthy that the measures will cover another rising group of workers commonly known

for our long-term social and economic progress. But it is also a Budget that signals a change of policy from giving to Singaporeans in general to one that targets its biggest surplus to those who need it most. It is a move that nobody can fault and one that sets its tone on reinforcing the value of care and share with the less able or less fortunate in the society. This is a "Progress in Unity" Budget. question of understanding how to motivate and inspire creativity, innovation, initiative and striking a right work-and-life balance. The problem is that not all aspects of the world of work have kept up with the times in the knowledge economy. I, therefore, find that we have a number of discords between the economic realities and the labour market structures and practices. great extent, still a heritage from the Industrial Age. It seems to me that the question of work reward-life and shift of value from machines to human capital must be considered together. Systemic change to the economy, where decentralisation and outsourcing are now the norm, would have a profound effect on the way that jobs are organised and how workers receive their benefits. Over the years in Singapore, economic policy doctrines have shifted towards market liberalisation. Labour markets are expected to adjust to changes on their own, as the old levers are no longer available or not relevant to help in the adjustment process. With increasing reliance on the markets and the move to the knowledge economy, regulations also need to shift from protection of the individual to empowering and enabling them to protect themselves. Public policies reflecting this changing employment landscape and a fitting infrastructure for this brave new world should be promptly addressed in fiscal and policy measures. workforce. The skill obsolescence challenge needs to be effectively addressed, and labour markets need to be accessible while accommodating different forms of participation. A very recent survey of about 12,000 employees in Europe by the Manpower Inc is shedding some light on the shifting expectations of the workforce. Senior citizens are likely to be driven by different priorities and motivations and will have their own expectations of how to balance work-life, compared with young people. With increasing age, life priorities change.

as the independent workers. Broadly classified, they include the contract workers, freelancers, self-employed, sole proprietors, consultants, part-time or contingent workers, temps, etc. The knowledge economy work environment certainly encourages the growth of such a sector and, of course, the economic downturn of the past years has encouraged businesses to adopt a range of flexible employment practices, from outsourcing to downsizing, to greater reliance on temps - contract workers, freelancers, and so on. Firms employ them to cushion volatile market conditions. And from a business perspective, they have worked well. Companies were able to adjust quickly during boon and bane business cycles. Unfortunately, this independent workforce also has the least institutional protection. Like the aged workforce and indeed, many of the retirees would join this work arrangement, individuals with flexible job arrangements pay a steep price for the way they work. They lack access to the same rights and protection enjoyed by the traditional workforce, making it increasingly more difficult to survive in a competitive environment.

While these laws and policies were not designed to discriminate independent workers, they were drafted with no

While the number of independent workers is growing, public policies and our system of delivering benefits to working people, particularly retirement benefits, and even health benefits, have not kept pace with these dramatic changes in the structure of work. Therefore, they must be updated to reflect the new era of flexible, mobile and contingent work. On this note, I would like to commend the Prime Minister for his far-sightedness in including this group of workers in his Workfare Bonus package where the bonus does not discriminate between employed and self-employed, full-time or part-time workers, so long as they have consecutively worked for six months and qualify for this income criterion. This is indeed tweaking our fiscal policy towards an inclusive society.

Having said that, there has been no comprehensive study or data on this growing group. Are they predominantly low or high-income? Are they male, female, old or young? Perhaps, it is time to commission such a study and adopt a new paradigm on building our workforce infrastructure. Existing and new organisations could also be incentivised to provide independent workers with the things that traditional job-holders receive from employers. This could give them some economic security, career opportunities as well as a sense of community.

An analogy is the craft associations or guilds during the middle-ages which

An example is a research done at the MIT's Centre for e-business that examines innovative new approaches to projects, staffing and management. These include B2B talent exchanges that link up large companies with networks of temporary staffing firms, new collaborative technologies that help virtual teams work more effectively and tools to enable e-procurement of services, including freelance talent. Given the growth of independent workers, it is all the more important to build an infrastructure that can provide independent or aging workers with the support that they need.

Mr Speaker, Sir, let me now turn my attention to an issue that is particularly close to my heart and that is the area of retirement savings. I was indeed disappointed with the lack of mention of this topic in this Budget. I think I will not do justice to the possible solutions if I am to try to concise them within this short time. So instead, I hope to bring home the magnitude of this issue and ensure a process where it is put high on the agenda. Why should we be concerned with retirement savings as an issue? The CPF, you may say, is there for all and will

There are, of course, other concerns with the CPF that I could spend long hours debating them. However, that is not my purpose here today. Let us leave the CPF where it is, as a useful but reduced component of the retirement landscape in Singapore and move on to analyse how the pension shortfall arises and how it is only going to get worse as time goes by. Let us look at the demographics. In the last 15 years, the life expectancy of Singaporean females has increased from 76 years to 81 years and the males from 71 years to 77 years. In the next 15 years, it is expected that another six years or so will be added to these numbers respectively. At this rate, it will not be long before the average retirement span is as typical as a working life. Relying on the CPF and the way it is headed will mean that there will be significantly less to go increasingly further, and the numbers simply do not add up. In the good old days, a typical family would comprise two or more grown-up children supporting one retired aging parent. The average child per family

So what is the solution? I think there are a number of alternatives. The first is an extension of retirement age and this may be inevitable anyway, but will require a change in both the employer and employee's attitude, as well as the workforce infrastructure that is conducive to the working aged, employed or independent. Another solution, quite simply, is that we need to help to create an environment that encourages not only employer-sponsored pension plans, but also industry support group schemes that cater for the self-employed and the entrepreneurs who are so important to our future. This latter group is the most difficult to cater for, but we must find a way.

But creating a pension environment is not something that the Government can easily legislate. It has to come as a result of the various parties, seeing the benefits and actively wanting to be part of the environment. To do this, we have to help answer the question: what is in it for me? Of course, the Government can throw in sweeteners and, through the tax framework, direct the general thrust and format of the schemes on offer. I will come to that in a moment, but the drive has to come from the interested parties themselves.

The most interested party, of course, is the worker, as it is his future that is at stake. What is in it for him is the comfort of knowing retirement will not be a struggle, something to be feared, but that

On the benefits side, the biggest draw has got to be employee loyalty. Singapore suffers from an overly fluid workforce where loyalty ceases the day after bonus. This is obviously an intangible, but it is nonetheless real and any scheme will have to be tailored so as to carry with them some stickiness. It would clearly be unfair for a moving employee to lose accrued benefits entirely. However, a delayed vesting schedule, say, by one or two years, would be sufficient to make the decision to leave more mementos, leave them as it is currently. What is clear is that the scheme should not contemplate the payout at any time before retirement. Otherwise, the desire to leave may be enhanced even further. One suggestion is that the value is paid into the CPF Special Account where it must stay until retirement. That helps to deal with the portability concept while the vesting adds the loyalty component.

In addition - and this is where the Government comes in - tax breaks should be available, not only for the on-going

But in the shorter term, we, as an economy, also benefit. First, with the larger pension fund, we will be able to develop Singapore into the dominant regional force for the wealth management industry. The second is to continue to attract, but more importantly, to retain the so-called, foreign talent. The creation of a healthy thriving pension industry will generate significant interest for fund managers as a large pool of funds becomes increasingly available for management. And as far as foreign talent is concerned, it cannot be expected that a stable long-term environment can be created if this important resource is excluded as it is currently, from being able to save in an efficient manner.

If it is to be set up, should the individual decide on how this pension fund is invested as in the SRS or CPF? My view is that few laymen are investment experts. The funds should be professionally managed for simple safety reasons although some degree of high level preference could be worked into the overall investment mandate. In addition, full resources on large schemes can reduce the drag on value significantly through reduced management charges. The worker is thus getting access to low-cost expertise which is something normally beyond his reach. You may ask: how do we move this forward? Many people are not aware that the tax efficient pension framework currently does exist.

consideration of them. As a result, many are faced with tax penalties. For example, if they attend some educational seminars or conferences, they will not be able to claim against it, or up to a very low ceiling, compared to if they are employed and the company fully pays for those conferences. They also pay for high insurance cost because it is done on their own and not collectively, and, of course, inadequate retirement savings.actively tackled the needs and concerns of independent workers. These groups could include the professional societies, unions, community organisations, staffing companies, college, corporate alumni groups, Government NGOs or non-profit organisations. Over the longer term, there is indeed a great potential to link up independent workers, the staffing companies and providers of training and learning services. Perhaps, we can also pioneer a sort of a network guild model, bringing together a group of focused professional organisations and linking them with providers of services of independent workers. This model is particularly interesting since it actually parallels the network structure characteristic of today's most innovative business organisations.stand the population in good stead when the time comes. It is there for all, I agree, but that is all. Studies by PricewaterhouseCoopers, the major accounting firm, have shown that the income replacement ratio for the lower-paid would be in the low 20% range and for the middle and higher-income earners, even lower, and that is if the CPF is their sole pension source. This is against an accepted international target of 66%. What level of subsistence income or annuity can one obtain from that savings? Certainly, they may have withdrawn sums to purchase a property which they live in, but if the answer is that they now have to sell this or do a reverse mortgage to unlock the cash, they will need to survive. Does that not undermine the whole concept of home ownership that the Government espouses? now is 1.23 or so, and parents are living longer. The problem is, so are grandparents living longer. The pyramid is rapidly inverting. What we now have is 1.23 children supporting mum and dad, granny and grandpa. And if 1.23 of that son gets married to the other 1.2 of the girl, you can add another six to the list. We need to face these demographic challenges and face them now before it is too late.he will have a basic level of self-sufficiency to look forward to throughout the twilight years. If you can save on top of that, then it is good and the pressure is solved. What about the employers? The employers, before getting into the benefits, will probably have two concerns. The first is the cost contribution to the scheme and the second, the cost of administering it. These are valid, but ones which I think can be handled by repackaging employees' benefits as well as reaping efficiency from economies of scale. For the smaller businesses, woo schemes and multi-trust accounts could be used to bring down and share those costs. This may be met with some resistance by employers when schemes are first set up. But the key elements of a successful scheme are that there must be some sacrifice and there must be discipline despite transitional issues.contributions, but also for initial contributions that seed the scheme. These breaks could come in the form of double tax deductions and help add to the appeal of the scheme. This may appear to be an initial cost to the Government but there is no doubt that if a self-sufficient and effective pension environment is created, significant pressure will be taken off the need for Government intervention and potentially losing bailouts further down the line. These, of course, are longer-term benefits.This is in the guise of the scheme that is approved under section 5 of the Income Tax Act. Largely, this scheme became redundant under the dominance of CPF. However, in the weakening grip of the CPF, we should revive interest in the section 5 plan concept. The scheme, as it currently stands, has some deficiencies. And the first step would be to address some of those and create a scheme that caters for the needs of a 21st century workforce. A number of companies, multi-nationals included, are starting to look at the section 5 schemes again. But we need to quicken the pace of this progress. Where the Government can help is in three areas. First, by instigating a process that will take a look at how the scheme can be improved and thus be given added appeal for employers. Two, by setting guidelines for the general shape, terms and conditions of the plan to ensure they meet their longer-term objectives. This can be controlled through the tax approval process as in many countries.

Three, by assisting in the marketing of the scheme, perhaps working with the accounting firms, business associations and so on.

I would, therefore, like to suggest a committee to be set up which comprises a cross-section of the stakeholders, including the labour unions, Government officials, accountants and tax consultants, to perform a thorough examination of this whole area with the view to recommend a way forward that ensures the future of Singaporeans.

We are no longer talking about helping them to realise their retirement dreams. What I think we are talking about is avoiding the retirement nightmare urgently.

Last, but not least, I would like to briefly highlight a rising sector in the global stage which not only complements

The scope is very wide. It includes not just NGOs, VWOs, but also clan associations, craft associations, professional organisations, trade associations, UN bodies, regional bodies, social enterprises and local franchise models like the Kao Shen Restaurants, High Point House Removals, Cabbages & Condoms, Restaurants, WCs, Cafes and so on.

In the more developed countries like the US or Europe, this is one of the fastest growing digits in the GDP. It has been found that the people sector often fills the gap where macro-economic policies and government agencies could not adequately address. Some of the benefits are as follows. This non-profit industry could be fashioned as one of the new economic engines of growth and the spin-off could be enormous in MICE, which is meetings, incentives, conferences and exhibitions, in fund management, in tourism, R&D, standard controls, as well as socio-political and economic leverages. It can also help to expand the job opportunities to suit the changing employment landscape and expand lifestyle choices. It can also inculcate good value systems in the society. As it progresses, we can mature into a more caring and less individualistic society. Last, but not least, it can also cultivate a good people-to-people tie with the region and international communities as we witnessed during the year of tsunami rescue, relief and reconstruction efforts.

Singapore, with its connectivity and efficiency, is well-placed to exploit this

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Here, I would like to declare my interest as the founder of the Social Innovation Park, which is a non-profit organisation and social enterprise. Recently, the Social Innovation Park, in conjunction with the Straits Times and the Schwab Foundation for Social Entrepreneurs, declared Singapore as the 24th country that they are giving the Social Entrepreneurs Award of the year. The Schwab Foundation is expected to add a dozen more countries to the list this year, signalling a huge interest in social enterprise as problem solvers and change makers in the 21st century. To give a technical definition, social entrepreneurs find gaps in societies, seize the opportunities to innovate and create systematic, sustainable social transformation based on a sustainable market or business framework. Social entrepreneurs undertake both public and private sector functions simultaneously. On one hand, they work with those populations the governments have not been able to reach effectively or have ignored. On the other, they address market failures by providing access to private goods and services where business does not operate because

Today, many large companies are seeking ways to access new markets and build their brand as responsible companies. Many support social entrepreneurs to maintain their competitive edge and re-invent themselves along the way. Governments also have much to gain from supporting social entrepreneurs but they should not make the same mistake of seeing them as simple service delivery subcontractors. Social entrepreneurs are system change agents. Like business entrepreneurs who are innovators in the corporate sector, social entrepreneurs are innovators of the public sector. Government should create the needed support system to allow them to innovate and scale, without wanting to take over the innovation process and kill it as a result. To go even further, Government could incentivise social entrepreneurs in both the for-profit and not-for-profit sector via MTI and MCYS respectively to kick-start and grow this sector. It is precisely in helping those successful social entrepreneurs to achieve scale that our solutions lie. We need new alliances, new thinking. Government and aid agencies can no longer be the sole actors in addressing these social gaps, neither should these always remain cost centres. The private sector can no longer see itself as simply in the business of making business, and the philanthropic sector cannot be expected to come in to fill the gaps all the time. We need hybrid organisations that creatively bridge across these sectors and address the social gaps. I would elaborate more in the COS.

In summary, Singapore would not have been what it is today without a hardworking population. A hardworking population thrives in an environment that

Mr Deputy Speaker, Sir, I support the Budget.

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our ethos of a self-reliant society which is fitting for a knowledge economy where people are its focus, but could potentially be a new engine of growth in Singapore. I am referring to the NGOs or VWOs for-profit and not-for-profit social enterprise sector. Let me term this generally as the "people sector". economic sector. With our excellent logistics network, transparency and premium branding and a complementary growing wealth-management sector, we can engineer ourselves into a regional hub like Geneva, Belgium and Washington and even give them a run for their money since we enjoy clock-work efficiency at a relatively lower cost. In Singapore, this sector was given a boost with the recent regional disaster relief efforts. More people have come forward to set up organisations to cultivate self-help and mutual-help. Of particular interest to me is the social enterprise sector and micro-finance. the risk is deemed to be too high or the financial rewards perceived to be too little. This distinguishes them from social organisations built on the paradigm of charity and using the approach of charitable acts. rewards hard work, not just economically but socially and psychologically. Building a conducive workforce infrastructure that fits into the 21st century knowledge environment and the possibility of enjoying one's fruits of labour as well as self-reliant groups in both the for-profit and not-for-profit sectors are thus critical pillars to Singapore's continued shine on the global stage. New eras, new challenges. We need new tools to propel the economy and society forward and address the changing landscape. The focus of the knowledge economy is on the knowledge worker. Let us focus on our people. May we progress in unity.

Mr Deputy Speaker, Sir, thank you for the opportunity to join in the Budget debate. I will focus my speech on four key points and on feedback that I have received from my residents.

First, I wish to congratulate the Prime Minister and the Government for proposing a budget that will put cash into the pockets of many needy families. This is only correct because it is an endearing promise of the Government that when there are budget surpluses these would be shared with the people. I also support the principles by which these surpluses have been shared. The more needy will receive the most amount of money. Again, this is only correct because it is a testament to the principle that as Singapore progresses no one must be left behind.

I have noted, however, that we seem to be torn between setting up a welfare system and other ideas that we have creatively called ComCare or Workfare or Progress Package. I fully appreciate the

At the same time, we cannot ignore that there is a group of people in Singapore who bears the brunt of our economic cycle. Singapore's income divide increased drastically between 1997 and 2004, that is, during the economic downturn. While the average income of Singaporeans fell by only 2.7% during that time, that of the poorest families fell by a staggering 49%. Put differently, in real terms, the bottom 20% of our population earn less today than they did 10 years ago.

While Singapore, nimble as ever, can quickly adjust its economic policies to face the challenges of economic change, poorer, less educated Singaporeans are not able to adjust nimbly. Whenever Singapore decides to change tack and pursue new opportunities in the knowledge economy, there are dire consequences for a group of Singaporeans who are made redundant because they do not have the skills to be gainfully employed in this new economy. The Government has done well at promoting skills redevelopment and the need for life-long learning. It has made starkly clear that those at the bottom of the skills chain must find ways to upgrade or face the reality of being left unemployed. It is easy for us to say that the Government will help those who take steps to help themselves, but what do I tell the 50-year-old cleaner, odd-job worker in a factory who came to see me during my meet-the-people session? He became unemployed because his factory shut

I have no doubt that he will be grateful for the money he will receive if the Budget is approved, but, it only gives him temporary relief. What we need, Sir, is a comprehensive solution. We need a commitment from the Government that people like my 50-year-old cleaner have an assurance that they too are part of Singapore, whether the Government generates a budget surplus or not. We also need a promise from the Government that we aim to build a Singapore where we will be hard-nosed about our economic realities but we will not be heartless about the consequences of our economic policies. We need to let our people know that even as Government policy makers advocate economic change and urge the population to retrain, reskill and readjust their expectations, they will do so with care and realise that we are not dealing with mere numbers. These are lives of Singaporeans and they, especially the

According to Merrill Lynch and Cap Gemini World Wealth Report released last year, the number of millionaires in Singapore is increasing faster than any other country. Those with assets of more than US$1 million now number more than 48,000 - an astounding 20% more than the previous years. However, the bottom 60% of the city state's four million inhabitants who are not as well educated or skilled face an increased possibility of unemployment as well as daily hardship to make ends meet.

My second point, Sir, is strengthening our social cohesion. This topic is close to my heart. I am a strong believer that Singapore's success is rooted in our ability to remain socially cohesive as a nation. I cannot say it better than the late Mr S Rajaratnam when he penned our national pledge. If we are not one united people regardless of race, language or religion, we are doomed as a nation. Beyond potential flashpoints of race and religion, we cannot ignore the growing income divide which could potentially drive a wedge between the haves and the have-nots. This is something we have to manage carefully but more proactively. While I agree with the Education Minister, Mr Tharman Shanmugaratnam, that we should allow inter-racial friendship to develop naturally in our schools, I believe there is room for a nudge in the right direction. And what better way than to start with how the pledge is taken each morning. As I have said elsewhere, 40 years ago, given the backdrop of communal violence, the pledge resonated well with a whole generation of school children. Today, I am not sure. My fear is that by reciting the pledge mechanically every morning, we are not giving it life. I am not sure that our children understand the lofty ideals represented by the words

difficulty. A country like Singapore simply cannot afford to have a class of citizens who become dependent on welfare and who become economically inactive. It is simply not sustainable. It will do our economy no good if there is a percentage of our population who become dependent on handouts. Worse, if this group becomes endemic, it will do our social cohesion no good either and then where will Singapore be?down. He tried getting another job, but after many years in the factory, he had a certain salary on which he bought an HDB flat, supported his school-going children and managed to make ends meet. He cannot find another job which will give him a similar salary. In any case, cleaning contractors prefer to hire younger and even foreign workers who expect a lower salary and who can put in long hours because they do not have families in Singapore. When I told him to lower his expectations, he told me that if he takes a pay cut he would not be able to afford his housing instalments and other bills. He would not be able to afford his children's school-going expenses. I told him to be patient and upgrade his skills. He told me that if he had been good at learning he would not be an odd-job worker and menial cleaner. He does not think that at his age he would be able to pick up new skills. All he wanted was to continue with his simple job so that he could put his children to school and that, hopefully, they would have better lives than his. What do I tell this man? poor and needy, deserve twice the attention and care from the Government because it is they who are least able to fend for themselves. we use in the pledge. I urge the Education Ministry to find ways to make our pledge come to life and to draw on the many talents of our school teachers to explain to our children why our pledge is so important a symbol of our nation's hopes. Even as I commend the many grassroots' effort to help forge our social cohesion,

I hope that the People's Association will redouble its efforts to give support to the work of the grassroots organisations, particularly by explaining to the public why their work is so important and how the public can get involved. In this respect, Sir, I wonder if we attach enough importance and allocate enough resources to tackle the concerns that I have expressed. Significant steps need to be taken to strengthen our national identity and guard our fundamental values that form the cornerstone of our nationhood during the early days of our independence.

Wholesome education

Very often, Sir, through anecdotes and films, such as "I Not Stupid" and "I Not Stupid Too", we see and hear how parents want the best for their children - the fight to get them into good, branded schools. Sometimes, in trying to secure what is best for our children, parents employ methods that are far from exemplary and take the competitive spirit too far until it turns ugly. When the journey through school becomes a stressful affair, wrong values are imparted by parents and, at the end of the day, our children will suffer. Our young ones are increasingly buried with extra classes outside school, more specifically, tuition classes, as the typical caring parents strive for academic excellence. There is a danger of the child being academically strong but exhibiting other signs of inadequacy. They may be emotionally inept and far from being wholesome. The over emphasis on class performance

Non-academic educational path

Children who are not academically inclined and more technically oriented are entitled to an educational path that is pertinent to them. They must be given the opportunity to acquire skills and the know-how that are relevant and current so as to make them employable. Effort is needed to change how technical training is perceived. It is certainly not a dumping ground for academic under-achievers or problem students. Do we discourage our youth from seeking careers in so-called blue collar vocations?

In the US, Sir, studies show that technical education graduates require 20% less formal on-the-job training than those without technical education background. Nearly 50% of such graduates continue their education, and these are students who love what they do and who embrace life-long learning. It is indeed timely for us to give technical education and vocational training the necessary boost that is deserved. As the labour markets become more specialised and economies are demanding more skills, the future of vocational education must be secured. It must be given equal attention as other educational paths. We need to find answers to the following questions. How do we keep technical training current and relevant to industries' needs? Do we need to upgrade the public perception of technical education in Singapore? How can business and industry show support for the best vocational programmes that exist?

In conclusion, Sir, I would like to emphasise that children and youths are the future of the nation. And I am very happy that the Minister for Finance has ensured that they have better prospects and opportunities. In addition to that, I must reiterate that the needy must not be forgotten. A lot more must be done to ensure that they are protected, especially if they are unable to help themselves because of the current pace of development. While we are forced to act decisively to safeguard the nation's interest in the globalised world, we have a responsibility to the citizens of this country who are unable to catch up and join the race. This is their home and they have contributed to the nation in one way or another, and deserve more. I am sure Singapore is not only for the rich and strong. This was never the vision of our founding fathers nor our past leaders.

With that, Sir, I support the Budget.

inherently teaches the child that his worth is only measured in such terms and he, most likely, will judge others in a similar way. Sadly, parents may not realise that success is not hinged on examination results alone. Straight 'A' students will not be guaranteed of success in life and career. Experts do agree that academic achievements do not guarantee the attainment of future career and the fulfilment of life.

Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate.

I rise in support of the debate on the Budget. Like last year, this Budget is a budget for the people - near term and long term. While there is a strong focus on our low-wage workers and the elderly, there is something for everyone, including our indispensable NSmen. There is certainly a positive buzz in the air, accentuated by the positive outlook for both our local as well as the global economies. I have no doubt that this will have a beneficial effect on our retail sector. At the launch of a commercial centre yesterday, the operator/developer had commented that whilst there is no direct initiative like a Progress Package for the SMEs, he believed that with cash in the pockets of Singaporeans come 1st May, the retail sector would no doubt be beneficiaries.

I wish to speak on the elements of the Budget that focus on two key segments of our population base, namely, the young and the lower-wage workers as well as on increasing competitiveness of the economy.

On the young, the Opportunity Fund is aptly named. The funding opens up new vistas for the young, helping students from lower-income families gain access to enhanced learning opportunities. I must say that our young are already very fortunate and it certainly looks like things are getting even better. In my days, a trip to the Botanic Gardens was already quite a treat. But, today, a botany trip takes our students to Tioman, Langkawi, and our students go to France and the US for historical trips, and humanitarian trips to China and Cambodia. The Opportunity Fund would put the wider horizons within the reach of an even bigger pool of students.

A recent MOE press release has stated that "exposure to the region has tremendous educational value and strengthens personal resilience among our students". The objective of the Opportunity Funds is excellent, but the implementation has to be exercised with care. I support the encouragement for school-based innovation and flexibility, but I want to add a word of caution. My comments are based on certain incidents involving the Community Involvement Programme (CIP) in our schools that have come to my attention.

The CIP builds an awareness of service to the community, an awareness that a little effort on one's part actually goes a long way for some of the less well-off in our midst, an awareness that, if we try, we can always find the time. And among the students that I have had the opportunity to interact with in the schools, in my constituency, among the friends of my daughters and the children

Now that Opportunity Funds open up broader avenues for even more ambitious projects, I hope that the relevant agencies, and if there are multiple agencies that want to take a lead in

From the young, I wish to move up the age ladder - the Progress Package is certainly a big bonus to all. With Workfare, when one works, one gets an additional reward. In this way, in a growing economy, the fruits are shared by almost everyone - a recognition that not everyone benefits directly from economic growth and needs help. Workfare is one way.

Allow me to cite the example of two fishmonger brothers in Bukit Timah market. They get up early, they sell fish,

Last year, at the Budget debate, I brought up the issue of freeing up constraints so that hawking is easier. I know that some experiments at the Town Councils are happening, but we must do more, be bolder and faster. Take, for example, the office attendant in my workplace. The wife makes good kueh lapis from the house, and it is all by word of mouth. We must make it easier for women like this to strike out and create a business, and there is no better place for them to go but the shops and stalls in our HDB heartlands. In each and every town centre, in every hawker centre, we have the potential that some stalls and shops may rise to be the next Corona Chicken, which has grown from one stall to a regional franchise, or the next Food Republic that is bringing Singapore-style foodcourt dining to millions of people in China. It is the very fact that they had a small start, tried, calibrated, changed, adapted and grew that we have the next wave of local big names. So, where can they start? The heartlands, of course.

of my friends, I am rather pleased that we are nurturing a young generation that place others ahead of themselves. For them, sharing is a way of life and they find some level of enrichment through community service. However, parents place a lot of faith in the schools as they entrust their children for a good part of the day in their care. As a result, there must be guidelines, oversight and accountability for the CIP programme. Not all schools are at the same level of vigilance as they possibly ought to be when it comes to overseas CIP projects. Very often, the schools outsource the administrative and operative aspects of these trips. I would like to ask whether there is a set of guidelines and checklists for the schools for the verification of the background of the operators and the people, as well as the facilities at the destination to ensure the safety and well-being of our students. Very often, parents trust the schools but, in reality, how reliable are the parties to which the schools outsource? With students travelling farther, we should take more precautions to ensure their safe journey, return and treatment. It would be foolhardy to do less. When students engage in any particular initiative or activity, parents have often relied on the comfort that these initiatives and activities have already cleared certain criteria. This is especially more pressing as we move beyond just selling flags for the CIP. This desire is not to stifle initiative on the part of schools or students, but we just want them not to be exploited, and having had a bad experience, these students get turned off from ever lending their strengths to the community.coordinating for these agencies that have the responsibility for students and their programmes that they exercise vigilant oversight, develop a system of checks and balance and ensure that there is a high degree of accountability. In the event an unfortunate incident happens, most parents would certainly look to the schools for some form of accountability, and this extends beyond just school organisations. There are also external organisations, however well meaning, that mobilise and organise students. I hope that as long as it involves students of school-going age that there is a similar degree of oversight. In the days of Internet, these organisations can reach far and wide, and many readers trustingly accept what they read off their websites. Hence, we must have our agencies, whether it is MOE, NCSS or others, not only to endorse such organisations but also to take on the responsibility for oversight of these activities. Yes, responsibility can be and is a burden, but do we have a choice? As we even subject maid agencies to accreditation, is it not more pertinent that we ensure that any organisation that raises funds, uses sources of funds from the Government and involves our young be likewise accredited as well? This means exercising oversight, vetting the volunteers and full-time employees that run such organisations, thereby ensuring that they are governed by the right people.pack up late morning, and adjourn regularly to a round of golf before turning in early, as they always have an early start the next day at the stall. Would this have been imaginable just a generation ago? What is my point? The point is that Workfare is just one way. Now that we have Workfare, we must look beyond it. We must create opportunities for our people to be entrepreneurs, to be small businessmen, to be hawkers, to eke out a living by their hands, their wit and their sweat.

Just as McDonald's proof-tested its formula on American audience before it conquered the world, our local talents must have the opportunity to sustain and refine their formulae among our own people before they can even think they have a chance to move outwards. Here, I am pleased to discover that Spring Singapore is now taking up the challenge to be the champion of SMEs. And now it is my fervent hope that some attention be

I encourage the Government to look at sharing the risks. In success, all wins. In failure, the entrepreneur is poorer in the pocket but richer in experience. But they must bounce back, else why even bother with the experience? When these entrepreneurs fail, yes, they fold. When I come across these people, my heart bleeds for them. I hope we can devise a more structured way to solve this problem. It is not just a matter of another one bites the dust. It is not as clinical as calling another tender, another person steps up, and then we go through the cycle again, hoping that he succeeds and he fails another tender. If he succeeds and grows, I believe Singapore gains. So, why not experiment with ways to share the risk of upsides and downsides with the stallholders and shopkeepers? Yes, there will be issues and concerns on authenticating business levels, the proverbial three books - one for the boss, one for the wife and one for the taxman. We must not be deterred. Only when such small scale opportunities abound that the entrepreneurial spirit would thrive. And we must make the HDB heartlands fertile ground for our entrepreneurs. This way, we increase the probability that we have a continuous flow of companies and franchises that would put Singapore's name on the global map. They would be our BreadTalks and Osims of the future.

My remaining comments would be on the competitiveness of the economy. The Prime Minister has outlined our strategies to upgrade and restructure our economy so as to differentiate ourselves from our

Another example is the recent win by the Singapore consortium in Qatar for the new airport design. This is a prime example of how Singapore companies pulling together can make waves, and we must continue to do more. So, firstly, we must form consortia, go out together with either a Government agency or, even better, a local company leading the smaller ones. Additionally, companies in Singapore must combine to form bigger entities, increasing mutual competitiveness and becoming even more capable.

Take this anecdote told to me by a Singaporean friend who had lived eight years overseas. He has a partner who is consulting for EDS, which is a large US-based computer services company. And he mentioned that EDS was competing for a Singapore Government project and that EDS was partnering a Singapore company. My Singaporean friend rattled off a couple of names that he knew so as to guess the identity of the partnering firm. And it dawned on him that all the

I do not profess to be an expert on the specific measures to nurture entrepreneurship and increase competitiveness. But I do believe that, together, we can take on the world. Our objective today is to appeal to the Government to be as innovative, ground-breaking, proactive and aggressive in its efforts to boost our local enterprise sector. All entrepreneurs have to start somewhere and often fail at the beginning before they can succeed. Hyflux, Creative and many other local enterprises started as SMEs. We need many more Singapore companies like them. Their eventual success translates into more jobs and greater tax revenue for Singapore. Only then will our economic growth be truly sustainable.

In closing, in support of the Budget, I say, let us protect the young, fly cover for the poor stallholders and shopkeepers in our heartlands and do our utmost to pull together local companies in the face of intensifying global competition.

Mr Deputy Speaker, Sir, I support the Budget.

given to the HDB shops. We must find a solution to the on-going survival of the shops and stalls in the heartlands. They are a necessity. As many MPs will agree, without these amenities, our residents will be poorer for choice and suffer much from inconvenience. Hence, even as rents go up, let us move away from being just a rent-extracting landlord.competitors. The initiatives include a $500 million R&D Trust Fund which will be increased to $5 billion in five years. This is certainly quite a boost. But beyond additional funding, I believe that if we become even more cohesive and coordinated, we can extract even more gains with what we already have. Take the example of the recently concluded airshow. Here, I want to declare my interest as an employee of ST Engineering which is an exhibitor of the show. Looking at all the advertisements, it is clear that the coming Singapore Airshow 2008 is pitched in competition with the Hong Kong bound Asian Aerospace and Expo. I see this as a real-life example of competition among countries. Local agencies and companies must pull together for Singapore's benefit. There is an external threat.names that he came up with are all Singapore companies which to a large extent have a common parentage. What this revealed to my Singaporean friend is that there are still too many Singaporean companies which are sub-skill on a global basis, still requiring foreign expertise in sizeable projects but, nonetheless, still content on competing aggressively with each other in this same Singapore pond. In business, there would be rivalries and pride. It is not easy to say that we put aside emotions. But if local business leaders focus on the fact that together we can stake out a larger slice of the global pie, then cooperation, collaboration and mutual help would result. Other countries have a large domestic market, we do not. Earlier, I mentioned McDonald's. They have the whole US market. Hence, why further handicap ourselves by not joining forces?

5.08 pm

Mr Deputy Speaker, Sir, there was an air of expectation when the Prime Minister revealed the country's 2006 Budget. This year, people are waiting to hear what the rebates and top-ups are that they will be receiving and the amounts, as many perceived that prior to the General Election, the Government will be generous. As expected, the mood was a feeling of relief and excitement after hearing the Budget announcement. And one of my grassroots leaders who sells chickens in the market told me in the evening of the Budget day that many faces are now smiling.

The distribution of $2.6 billion back to Singaporeans in the form of a Progress Package is a very generous package and a compassionate one. The Growth Dividends of FY 2006 are a follow-up to the recent years of giving under the Singapore Shares of FY 2001 and the Economic Restructuring Shares for FY 2002 and FY 2004, and other rebates and top-ups that have cost the Government altogether $10.45 billion. These benefits to households show that the Government cares about the people and is willing to make hard decisions by using its previous year's surpluses to assist the citizens in difficult years. At the same time, it is not forgotten that those who fell along the way are helped to catch up with the rest in life's long journey. Some households have found the going difficult since SARS hit our economy hard and many men and women have lost their jobs. Those in their 40s found it difficult to lift their head high after finding that they no longer are able to find jobs that they are familiar with, nor can they command a salary equal to their last drawn pay.

Corrective actions by the Government, such as retraining and job-matching programmes, have helped those affected by the economic downturn of the past to

This year's Budget went further than just job recreation. It allows the Government to extend a compassionate hand to many households by returning to them in cash whatever the country can give. Though it may not be enough for some to bring them back to their former level of economic comfort, the act of such giving is an example of compassion that the society should be proud of in our Government.

In our effort to further restore our competitiveness and find future sources of income, a restructuring of our economy has to take place. Globalisation has meant that our workers now face challenges beyond our shores. This has caused many to lose their jobs and while moving to another job, a lower salary is a common occurrence. Inequality of income has taken place. And those who are trained to work in the new industries, such as electronics and biotechnology, are seeing better paying jobs than those in the traditional, less high-tech industries. These inequalities have determined the level of consumption and wealth creation. I feel that the Progress Package, among other initiatives that the Government has ongoing, should in some way narrow the gap between the rich and poor. The overall picture constructed is one of inequality and we have to attempt to plug the nation's economic gap between the haves and have-nots.

The stage has been set in FY 2005 for CPF contributions by both employers and employees to be reduced. This would

One area of concern would be the cost of home ownership, which is relatively high. And in spite of the Government's assistance in cheap financing, many are still sacrificing other expenditures just to meet their mortgage payments. If the prices of new homes are set to rise, with the renewed confidence in the economy pushing it higher, then less amount of money will be set aside for savings for old age. Owning a home may be too expensive for some. Then having a rented property to live in may be the alternative. As such, I hope the Government can set aside a greater amount in its yearly budget to provide cheaper homes for those in the lower income group.

In remaking Singapore's economy, the Budget seeks to press on with upgrading and restructuring the economy in order to differentiate itself from other economies. The setting up of the R&D Trust Fund under the National Research Foundation with an initial fund of $500 million leading to $5 billion over five years is a step in the right direction. This will spur the growth of the knowledge hub that is needed for a global network of ideas where people and businesses can congregate here to share and learn from

Perhaps the Prime Minister could elaborate on how this year's Budget aims to do that, ie, either through a fund set aside or with non-monetary efforts from various Government agencies. Schemes such as the enhanced Designated Unit Trust (DUT) as well as tax exemptions from qualifying domestic trust and the underlying holding companies and foreign trusts are useful in attracting more asset and wealth management industries into Singapore. However, a combination of financial system stability, such as having a good risk-based regulatory and supervisory framework, with an array of competitive tax regime, is needed to strengthen Singapore's effort to market the republic as a sophisticated regional financial centre. These efforts seem to be paying off

adjust to the reality of the present economic environment. Citizens have made self sacrifices and bit the bullet they did, as they move from one job to another until they find a footing again. It is interesting to hear that Dr Tan Cheng Bock earlier said that it is now a fashion for job seekers to jump from one job to another job, gaining experience before they land up with the next job.mean that savings in the CPF account for all contributors would be reduced, thus affecting the amount allocated for the Ordinary Account, Special Account and Medisave Account. With most money going into the purchase of properties, which is still a high sum, less money will be available for savings for old age. With the workers' level of income coming under intense pressure, as companies find their margins of profits being eroded, owing to competition, savings apart from CPF contributions are no doubt going to be less. It is perhaps timely for the Government to explore various approaches to help the lower level of wage earners save for their old age.each other. The setting up of a new national broadband network that is faster than what is available will plug Singapore into a wider pool of knowledge and increase our ability to use technology in more areas. However, how much this will cost the country has not been demonstrated in the Budget. The Government seeks to build on its strength in manufacturing and services. So it is promoting activities that place a premium on trust, quality and service, not just efficiency and low cost. The focus will then be to raise productivity and skills level.

when comparing Singapore with, say, centres such as that in Switzerland, which is the world's top haven for wealth management and private banking, and which seems to be disadvantaged through unfavourable tax changes imposed on them as part of the Economic Union (EU). Thus, a good portion of the trillions of US dollars of private money could slowly move over here in the next few years, if Singapore keeps its tax as competitive within a stable financial and political environment.

For the Budget to support in the upgrading and restructuring of the

Growing our economy this year which is projected to be between 4%-6% is necessary so that new jobs can continue to be created. Inflation, on the other hand, needs to be carefully controlled so that the percentage increases in the cost of living do not exceed our growth.

Opportunities are abundant. They are out there. Singapore needs more enterprising employers who are ready to explore different ways of creating wealth than just compete in price, as I have heard my colleague just now mentioning that Creative and Hyflux were one of those examples.

Consumers are more educated and the products they demand must be more than just price to attract them. We have to be constantly moving ahead in ideas and in good services to create demand. It is noted that this year's Budget may have used up most of the surpluses accumulated during the Government's term. However, redistribution of future budget surpluses, hopefully, will still be sustained, as this year's Budget programme should help Singapore prepare for the challenges ahead and to achieve good growth results.

economy and to help Singaporeans progress, our workers, employers and the Government have to forge a strong tripartite partnership. This is ongoing, and it is still a strong partnership. And we have to constantly remain open and nimble so that our enterprises will be able to adapt to the changing conditions under heavy global challenge.

5.20 pm

Mr Deputy Speaker, I support the Budget. Many of my parliamentary colleagues have spoken on the business aspects of the Budget. I will confine my remarks to the people's component.

The Budget signifies the keeping of promises made by the Government to the people. The financial crisis in 1997 revealed that our economy had grown out of sync with the global economy. To remain relevant to the world, Singapore had to restructure. It was going to be painful. We called on the people to keep faith with the changes, to participate with the restructuring and to bear the accompanying pains. We promised to share the fruits of success. We have had three continuous years of economic growth, and before the end of the term of the current Government, it is timely and right that we share the surplus, to keep the promises that we made. This is also to reassure the people that the restructuring process is on track and has so far been successful. This is also important for another reason - the restructuring journey is not ended. It continues and our people have to do the same. This Budget will add to the trust between the Government and the people. It will provide us with the courage, reason and conviction to continue to strive for more and greater achievements.

I support the targeted approach adopted in this Budget to share the surplus. The effect of the economic downturn was not even across the population. The elderly, poor and low-wage earners were more badly affected. They have also gained less from the recovery. The distributed surplus will be more helpful and meaningful to them. I welcome the use of both the income and housing type in the distribution. I think this can be refined even more to further sharpen the targeting process.

I also support the distribution for its stimulative effect. Some people questioned the wisdom of this because of the possible inflationary pressure when the economy is already trending up and the productive capacity is tightening. However, it is helpful to note that the

I strongly support the additional housing grant for the low-income earners. Buying a flat is probably the biggest investment decision they will make in their lives. This additional grant is also timely since the wages at the lower end are likely to increase much slower than it used to. Some of my low-income residents have difficulties servicing their mortgage. They ran into problems the moment they have a pay-cut or lose their jobs. In the new economic landscape where the prospects of having to change jobs during their lifetime increase, and the chance of defaulting on the repayment of debts is greatly increased, this additional housing grant will reduce the probability of default.

Many of the people who had problems with the mortgage had also bought and sold flats. They bought a flat direct from the Government at a low price. They then sold the flat on the open market at a higher market price to realise the value gained, and then buy a bigger flat with the returned CPF savings, but now taking a bigger loan at an older age. This is clearly a recipe for disaster, should their economic situation deteriorate. To discourage owners from cashing out on the gain in the value with their first flat, I would like to propose that if a buyer seeks a second HDB loan to buy his

Sir, I do have some concerns with the Budget, not of itself, but the possibility of creating the wrong expectation among the people. Firstly, the sharing of budget surplus is not a panacea for the income divide or low wage. It will not restore the income disparity between the high and the low-income earners. It is only a momentary boost. The answer to the income divide and low wage is to create more better-paying jobs and the ability of our people to improve their knowledge and skills to take on these jobs. There are no short cuts to this difficult problem. By reducing the proportion of people who need financial help for their livelihood, the more able we are, as a society and nation, to help those among us who are in need of help.

In recent years, we have shared some of our surpluses with our people through the New Singapore Shares, the Economic Restructuring Shares and now the Growth Dividends as part of the Progress Package. Some residents have asked if the Progress Package is like the NSS and the ERS. Those who think they are getting less want more. Those who are not working are unhappy that they will not get the Workfare Bonus. They said that since they do not have an income, they need and deserve more of the surplus as they have more financial problems. Yet, others feel that they deserve more Workfare Bonus. The point is that they do not understand the reasons for the distribution and some simply do not care to know. They are just happy for the cash. We must make the effort to explain to the people the rationale for the distribution. If we do not, the worry is that this will lead to unhealthy expectations and create a handout mentality. Another example is the service and conservancy and rental rebates which

During the recent difficult economic times, the Government has been greatly admired for its ability and willingness to help the people and business. We could do this because we had squirrelled away our surplus when times were good. This wisdom remains relevant today. In recent times like now, we have good reasons to share the surplus generated, but we must not create the impression that we no longer see the retention of surplus as important. We cannot de-emphasise the importance of building up our reserves and of keeping our surpluses for times when things are not rosy.

Sir, let me come to some general issues that I would like the Government to do more. I am very concerned with our young who drop out of schools. Like Dr Amy Khor said, most of the young have difficulties coping with their studies. They dislike schools and are likely to be disruptive which make matters worse. We must do more to help these youths. We have made the effort to keep them in school and help them to make the best use of their school time. Every citizen who is not prepared for life in Singapore becomes a lifelong problem for society. It is less expensive to solve the problem when it is still solvable, but, more important, it is the hope that every citizen becomes a wholesome person who can enjoy the quality of life that Singapore has to offer.

Sir, I applaud the efforts by the Government to improve the physical infrastructure for the elderly and the handicapped. The Lift Upgrading Programme, which is to make every flat

Finally, Sir, our race relations are good. But we must continue to work on them to make them even better. The race problems that surfaced recently in London and Paris showed that time alone does not even out differences. The recent cartoon issue reminds us of cultural sensitivities that need to be carefully managed. Since the birth of our nation, we had striven to build a united nation regardless of race, language and religion. The passing of Mr S Rajaratnam reminds us of this conscious effort. As a nation, we must continue with this task, with the same vigour as when we started. It is a journey without an end. We must never take for granted the unity of our nation, the good relationships among our different races.

shops in the neighbourhood and precinct centres have been complaining of poor business, when the national economic data were indicating growth. Somehow, the benefits of growth were not filtering down. Companies were making money. Income of the high earner was rising, but that of the low-wage earner was not keeping pace. This distribution of the surplus will get directly into the hands of the people, and I hope that it would stimulate business in the neighbourhood shops and centres.second flat, HDB require that the sale proceeds of the first flat be applied to the cost of the new flat. For his and his family's own good, he should be discouraged from cashing out.have been given for years. This is very helpful for the people, especially those with low income. But I think it will now be difficult to withdraw it. We must constantly review such benefits and incentives so that they do not become entrenched. We must do more to prevent this from taking root.accessible to the outside world for residents, has been speeded up. Soon, more ramps and other facilities would be built in our estates to provide our people with barrier-free access. But there is more that we should do for the elderly, especially those from the low-income families. Some are locked up in their flats while their children are working, or they are handicapped and not so mobile. Others sit aimlessly at home or at void decks. Yet, others do not have enough to eat. They lead lonely and meaningless lives. Let us do more to help them make the final years of their lives meaningful and pleasant.

5.28 pm

(In Mandarin): Mr Deputy Speaker, Sir, the Prime Minister announced the Budget to share the fruits of our economic success with the people. I think the people are most concerned with, and welcome, the various schemes that the Government is using to look after the low-income families, the workers and the senior citizens. Encouraging the people to work in order to qualify for the Workfare Bonus and the additional housing grant is

Yesteday morning, I participated in a breakfast meeting with our residents in the coffeeshop. A 70-year-old resident had some financial problems, but he did not ask me for financial assistance. Rather, he asked me to help him get a job. Of course, people will all welcome the Growth Dividend and Workfare Bonus announced by the Government. Especially for the lower-income families, the amount is quite substantial. This will help them settle their immediate needs, or they could save it up for a rainy day.

However, I have some suggestions to make with regard to the qualifying age for the Workfare Bonus. Among my residents, there are some who come from low-income families. Because they are not yet 40 years of age - maybe about 20 to 30 years old - they cannot qualify for this help. Most of them are lowly-educated and doing some manual work, with low income, in the region of $800 to $1,200 per month. Among them, many are married with two or three children and their wives are like them, lowly-educated and not working. Some of the wives are even foreigners and do not qualify for PR status. Many of them are just here on long-term social visit passes. They can hardly make ends meet and are constantly in arrears of utility charges, service and conservancy charges, housing instalments. Their children, if they are attending PCF kindergarten classes, would have to depend on the Kindergarten Financial Assistance Scheme (KiFAS), and even with KiFAS, some of them are unable to pay the other half of the fees.

Another point I would like to raise concerns the Government's Housing Grant for the low-income families. The Government is very generous in giving CPF Housing Grant of between $5,000 and $20,000 so that the lower-income families can own their own flats. But I would like to ask the Prime Minister and Minister for Finance, for those qualifying low-income families, if they have already purchased their flats, would they also be entitled to this concession? I wish that the Government would announce that these people also qualify for this allowance. For the low-income families, the very fact that they have worked so hard to buy their own flats shows that they are self-reliant, and this is in line with the spirit that we want to encourage for our Workfare Bonus.

Thirdly, helping the older Singaporeans. This is a very clear principle and spirit in this year's Budget. However, just by giving them the financial assistance is not enough. We should step up our investments in all elderly and disabled-friendly facilities. More importantly, we should extend this concept to the various Government departments and statutory boards so that it could be implemented in all the infrastructures and facilities, eg, in the markets, parks, hospitals, schools, MRT stations, bus interchanges and all public transport vehicles. Why am I saying this? Perhaps in the past few decades, we did not have this problem of

The other point I would like to raise is that the Government, in a plan to have a lean civil service, has set some targets for reducing the number of civil servants. The Prime Minister has also said that he will continue to freeze the number of civil servants for three years from 2006. I hope that while trying to attain the target of a lean and clean civil service, the Government will take the route of improving efficiency and doing away with bureaucratic and cumbersome workflow practices. I would like to ask the Prime Minister how is the Ministry of Finance going to assure us that it will continue to provide good service to the public. Otherwise, reduction in the number of civil servants may compromise the service standard. How does it ensure that the Government will not try to outsource its work and transfer the civil servants to the outside organisations, and thereby transferring the cost to the public, eg, increasing the charges, etc?

The next point I wish to raise concerns the Goods and Services Tax (GST). Mr Deputy Speaker, Sir, the Prime Minister

Finally, I would like to reflect the disappointment of some of the small businessmen on this Budget, particularly the neighbourhood shops. Many of them say that they have not felt the benefits of our economic growth. I think one of the problems may be that the Government has lumped them together with the small and medium enterprises for the administration of the various assistance schemes. These schemes are not specifically tailored to their needs. I think this may be the crux of the problem. At the moment, I think our definition of SMEs is too extensive and too wide. Some SMEs may have just two or three workers like, for example, in the neighbourhood shops, and there are also some which are factories with more than

Sir, I personally give strong suppport to the 2006 Budget as announced by the Prime Minister.

something which Singaporeans would generally endorse. Most Singaporeans will recognise the defects of a social welfare system. Most people in Singapore are still maintaining the good work attitude and spirit of diligence. They want to work, not just depend on the Government for direct financial needs.Many of them are trying very hard to look for jobs. I hope that the Government could relax the restrictions on the qualifying age for Workfare Bonus. Many of them may be below the age of 40, they have families and children, and their wives are not working. I think we should look after them. Of course, the Government wants to look after the older workers, and maybe we should also consider giving these people, who are below the age of 40, a lower bonus, maybe about 80% or 3/4 of the normal Workfare Bonus.an aging society and many of these Government agencies did not have this concept and it was not their practice when they were building these facilities. A few years ago, we had an upgrading project of our markets and hawker centres and I actively participated in the design. However, I subsequently discovered that we could not have both lift and escalator in the same centre. If you have a lift, you cannot have an escalator. This is something very puzzling to me. Eventually, we were fortunate to be able to come to a compromise. We gave up one of the lifts in exchange for an escalator. But in an aging society, we should provide barrier-free facilities for the convenience of our residents. This is a case in point. We should let hawker centres and markets have both the lift and escalator as a norm, and not as an exception. seems to have anticipated that some Members will raise this issue of exempting certain essential goods from GST. In the past, I used to agree with his view that by exempting these goods from GST, the higher-income people would be the ones who enjoy the greatest benefit, rather than the lower-income families. But I think the Prime Minister is looking at it from the tax loss perspective and not from the perspective of the lower-income families because, for the lower-income families, their main expenses are on daily essential needs, transportation fees, medical fees and children's education. GST may well be the only tax that they are paying. If such essential goods and charges could be exempted from GST, then they will benefit directly. They can save 5%. To them, for an expenditure of $1,000 a month, a saving of $50 is a big bonus. The Prime Minister said that we could use other means to help the lower-income families, eg, the service and conservancy charges and utility rebates. But these rebates are not permanent and they are indirect. So, once we revoke such rebates, they will not enjoy any benefit. I think it will be more direct if we could exempt them from paying GST on the basic essential goods and services.200 workers and a turnover as much as $10-$20 million. To these neighbourhood shops, they face a different set of problems from that of the factories. I think the Government should have individual committees or departments to look into the problems of the neighbourhood shops and help them to revitalise this trade for the benefit and inconvenience of the heartlanders.

5.40 pm

Mr Deputy Speaker, Sir, thank you for giving me the opportunity to participate in this debate.

I wish to say at the outset that I support the Budget, and shall focus on two particular aspects of the Prime Minister and Minister for Finance's speech.

The first aspect is growing our human capital and investing in the next generation. The Prime Minister had said that besides attracting talent, we are also investing in our own people, we are providing students with more opportunities from primary to tertiary level, we should develop critical thinking, reshape the education landscape, provide more curriculum options, etc. I agree with all of that. I think that that is a praiseworthy objective and that it should be firmly supported. There is, however, something I wish to say in that regard, namely, that it is not sufficient just to equip our students with skills. It is not sufficient to give them knowledge.

Education is more than just mere technocracy. In educating our young, we must not forget to teach them the things

There are many Singaporeans who do not know the fires in the crucible from which Singapore was forged, which means that they do not know our position in time and space in history and they do not have a sense of the uniqueness of who we are. We do not have 5,000 years of the history of China and we do not have the other 5,000 years of the history of India. We do not even have the relatively shorter history of Europe or the Americas. But what we do have is a nation that is forged from will, intellect and a set of principles, and this is something that they must know because, if we do not know from where we came, how do we know in which direction they are to go? We must know our origins in order to understand our destination. And why do I say this?

Let me just take two examples. The lack of awareness of our past history and of the racial and religious conflicts sometimes leads to calls for unfettered freedom of expression. It is good for us to be able to say what we like, we should be able to express ourselves. That is true to some extent. But when it is freedom of expression untempered by a sensitivity for race and religion, that is dangerous and is illustrated by the recent incidence of the prosecutions under the Sedition Act. It is also made all the more relevant by the progress of technology because,

There are many people who would cite the "kampung" spirit. They would tell you, "Oh, in the old days, we have the kampung spirit." But I can tell you that that is actually more illusory than real. If you go back to the Straits Times' archives and read the newspapers about history in the 50s and 60s, you will see the degree of racial and religious conflict that there was then. So, the sensitivity to racial religious conflict is hardwired into the collective memory of older Singaporeans, but it is not there in the sense of the younger Singaporeans.

A second example is the lack of awareness of the problems of segregation, which also leads to a lack of awareness of the critical importance of ethnic integration. There have been calls to do away with the ethnic integration programme, but the people who call for this do not fully appreciate the dangers of segregation. When Singapore was a colony and under the British, there were Indian areas, Chinese areas and Malay areas. That is a great policy for a colony. It is not a good policy for a nation. It is not a good policy for a people that are trying to create a national identity. So that is why I say it is necessary for us to understand our origins in order to understand where we must go. We need to understand the origins of the racial conflict in Singapore to know why we have to be sensitive to race and religion and why we have to have racial integration.

Those were just two examples. But the point I wanted to make was, it is very important for young Singaporeans to have a sense of our history. It is very important for young Singaporeans to know our political history as well as our economic history. And, therefore, when we put money into education to develop our human capital and invest in our people, it is important that the Ministry of Education should take a look at this aspect and ensure that our young people get to learn this.

The Prime Minister spoke of the Opportunity Fund and the fact that $50 million for education would be set aside as part of the Progress Package. This would be left to the schools to dictate what they would spend the funds on and the hope is that they will provide opportunities for the students to learn beyond the classroom and to build a firm foundation for learning. I would urge the schools to provide programmes that will encourage our students to have a better sense of our political and economic history. It is also noteworthy that Mr Rajaratnam, even in his passing, has reminded us of this fact. It is important because without this sense of our political and economic history, this Budget and every other budget just become an exercise in "what goodies can we get". And it is true. Whenever we listen to the Budget speech, everybody wants to know when we can get to the "goodies" section and see what handouts there are and what we will get. There is nothing wrong with that so long as we, as Singaporeans, understand that you can only hand out "goodies" when there is surplus from which to hand out "goodies". And not everybody understands that. I think it is important that we teach our school children from a very young age, basic economic principles. I know that economics is not a compulsory subject, but I think it is important to teach them these principles.

Let me just cite an example. I did a walkabout once. This was in the early part after the last elections when there was a lot of discussion on whether to raise GST. One of my residents said, "No, we should not raise GST." I explained that the Government needed to get money, had to have income, and one of the main sources of income was taxes and a better way of doing it would be indirect taxes for smaller amounts. Her response was, "It does not matter. Get the money from somewhere else. Whatever it is, just don't raise GST." There was a sense that she did not understand that the money has to come from somewhere.

For those of you who are of my generation and reasonably old would remember the movie, "The Sound of Music". There is a scene in "The Sound of Music" where Maria and the Captain were in the glasshouse, and she sang a song that is called "Something Good". But there is a line in that song which struck me as particularly appropriate for this Budget. And the line is, "Nothing comes from nothing. Nothing ever could." For those of you who remember that song, the Budget is just like that. The money does not come from nowhere. It is going to come from somewhere. It is going to come from money that we have earned, money that we have saved and money that we have put aside. So it is important for Singaporeans to understand that. We share surpluses, but we must also be very wary of pure welfare because if we keep doling out the money, very soon, there will be nothing left. There is a Chinese which says that wealth does not last beyond three generations. And I see this in the line of my work because I do litigation. Very often, in litigation, the conflict and the fighting take place at the third generation level. Because the first generation spends the time building up the

So that is why I agree with and applaud the workfare approach, which is to help people to help themselves. By and large, all the initiatives in the Budget - to help people to help themselves - are very good. I just want to comment on one, which is the topic that the Prime Minister spoke on, about creating hope for the future. The Prime Minister mentioned that the fourth strategy is to create hope to ensure that children do better than their parents and can help lift their parents out of poverty instead of inheriting their problems. So we should invest more in the education of children from low-income families to help them become school-ready and work-ready.

I agree with the sentiment and the approach, but I am not convinced that the existing schemes fully achieve this purpose. Existing schemes, such as the Financial Assistance Scheme and the KiFAS, tend to be generic in nature. They help a general percentage of people and that is fine for a general group, but they are not targeted enough to help some of the truly needy. One example is what I see on the ground. When residents come to see me and I find that there are children well beyond school-going age of 9, 11 and, in one case, 14 years old, who have not been to school, I have to try and get them into school at this stage. But putting them into national schools, maybe still possible at the age of 9, is very difficult if the child is 14 years old. He has to go to a private school. He needs a

The other problem is when you have families where the mothers are not working because they have several children and they do not work because they have young kids to look after. I often ask the mothers what is their educational qualification because I try to encourage them to work. Frequently, I find that they are either of Primary Six or Lower Secondary education level. The HOPE scheme, which is intended to help low-income families, is aimed at helping those who limit themselves to, at most, two children. So it is open to couples if both have no more than two 'O' level passes, although I understand that this is going to be relaxed to include parents without post-Secondary qualification and slightly older couples who still have low income after working for some years. But the HOPE scheme still maintains the rule that couples must have no more than two children in order to be eligible for HOPE. That is not a very hopeful scenario.

The people who are left out would be divorced parent with a child or children, single parent with a child or children, and couples with more than two children. And these are precisely the ones who need help the most. For families where there are more children, I would say this, the child, once born, cannot be unborn. The child is there. If the family has three, four or five children, that family needs help and telling them that they cannot have help because they have more than two children would not help them and would not lift them out of the poverty trap and it would not help the parents either. So we have to think of more targeted programmes to help the people who fall into this kind of group, the people who need the most help. And you need a holistic kind of help because it is not just money. It is about counselling them, helping to change their mindset, to understand

With this, Mr Deputy Speaker, Sir, I support the Budget.

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that make up the heart and the soul of a nation. And I say this because I read the newspapers in the past few days and noticed that there were quite a number of young Singaporeans who had written in to say that they did not know the role that Mr S Rajaratnam had played in our history. They did not know that he was the man who wrote our Pledge. Neither did they know about the historical circumstances which led him to pen the Pledge and to craft those words which have become the articles of faith that bind all Singaporeans, irrespective of our racial, religious or linguistic backgrounds. nowadays, you have young people who enjoy blogging. There is nothing wrong with blogging in itself. But, of course, in the process of blogging, people may unwittingly traverse upon the sensitivities of others and hurt others. This is a hard lesson which the Danes are learning today. It is a lesson that we learnt many years ago and because we learnt it, it is something that we enshrine in our laws to make sure that going forward, we will have a set of principles by which we abide where we can live together.business and getting the money; the second generation works to preserve it; and the third generation who do not have to work terribly hard but have the money, then just decide to quarrel about how the money should be spent and, very rapidly, the money goes. As a nation, we are still in the first generation and we should be careful to carry on to the second generation, and to continue for many more generations. lot of extra tuition and a lot of catching up. The existing schemes do not really deal with this.family and financial planning and also to encourage the mothers to go back to work, whilst, at the same time, giving them the support in terms of childcare. The other thing also would be transport subsidies if that were possible because, frequently, I find the school fees and school textbooks are taken care of, but sometimes they have difficulties in meeting the transport fees in getting the children to school. Whilst the Budget on the whole is a very good Budget and, by and large, helps a broad number of Singaporeans, there is still a small group that can be helped better under more targeted and more focused programmes.

Mr Deputy Speaker, Sir, thank you for allowing me to speak today.

Sir, I want to say that I support the Budget. It seems befitting as a tribute to the late Mr Rajaratnam and others of our founding generations of leaders that the focus of this year's Budget is to achieve progress for and share prosperity with the nation as a collective whole.

This Budget speaks volumes. As a result of previous belt-tightening measures, a willingness of workers and industry to undergo painful restructuring exercises, the economy has grown, unemployment has decreased and now, there is a surplus. Now the fruits of our collective efforts are being shared. The tax base has been broadened through GST, so all, rich or poor, contribute to our taxes. But instead of taxing the poor to give tax breaks to the rich as in other countries, we have, in effect, used the money to more than offset the amounts paid in GST by the poor and much more through utilities rebates, town council rebates and assistance schemes for school fees to benefit the poor.

I applaud the approach of the Government to investing in our intellectual capital and in our workers, in particular, the manner of redistribution of wealth generated to the lower-income group, while continuing to encourage them to be self-sufficient by advocating and rewarding work through the workfare programme. This business of making sure that only those who have worked continuously for more than six months get workfare is, I think, a key feature of the programme. Because there are far too many people who would rather not work than to receive lower wages than what they would have expected.

No doubt, the rich had paid taxes many times more than the amount that they receive in this Progress Package. However, I support the ideal that since we have sacrificed together as a nation, we share the fruits together and those who are in greater need would receive more. The rich may have spearheaded or invested in projects leading to the economic growth, but this would not have been possible without the support of our low-wage workers who have their role in propelling our nation forward.

Rather than to leave everything to market forces alone, in the Progress Package we have chosen to respect market forces in setting wages. But, at the same time, we have found ways to level out the playing field for the poor.

That is what families and friends do - to share and share alike - only this time we are not sharing poverty but prosperity.

In this Budget, we see the Government's attempt and commitment to narrowing the wealth divide without disrupting the market for wages. Unlike countries which I have recently visited, where the rich are fabulously rich but the poor suffer at the doorsteps of the rich,

Sir, the total amount in the transfers is worth about five Lift Upgrading Programmes annually for the whole island. This Government could have used the money for grandeur signature projects or could have just parked the entire sum into subsidies, if the idea was simply to get votes in an election year. But, I think the Government is serious about remaking Singapore and to put our money where our mouths are in order to achieve policy and behaviour changes. Tax policies and Government handouts are instruments to shape the behaviour of individuals and corporations and to encourage so-called better societal choices such as more energy efficient cars, air-conditioners and more investments in key sectors of the economy. The Singapore Growth Dividends signal that help is given, but so is free choice, and that the PAP Government is respecting individual choice and responsibility. The total Progress Package payout for the lower income elderly Singaporeans amounts to a not insubstantial sum, maybe about $2,000-$3,000, if one considers the worth of the rebates included. The individual given the money could blow it all on cigarettes and lotteries, or he or she could actually do the right thing and pay off arrears or set the money aside for their children's education. I think, in that sense, the Government is respecting free choice.

But I do have some criticism of the Package as it currently stands. Sir, I understand the difficult line between promulgating a simple but workable policy versus having policies that become unworkable because they seek to address every conceivable loophole. But, nevertheless, I would like to ask the Prime Minister to please consider fine-tuning the criteria for this and, hopefully, future programmes to distribute surpluses back to people.

Yesterday, Sir, I held a dialogue session in my constituency to seek feedback about this Progress Package and I would like to share with you the sad story of one of my grassroots leaders. When Madam Aini first booked her Executive flat, the price was just over $100,000. At that time, both she and her husband had well-paying jobs with the husband's income alone worth over $3,000 a month. When their family's turn came to choose the flat, the price of an Executive flat in Sembawang had risen to about $300,000, but they gladly accepted the new flat because of their six children. Recently, however, they suffered one setback after another, with both sequentially losing their jobs. For the greater part of last year, only Madam Aini has had a regular job in a call centre earning about $1,500 every month. She thought she was doing well and, in fact, had recruited two other neighbours to join her in employment, when to her shock and dismay, just after Chinese New Year, all 20 of her colleagues were terminated because the company decided to close down the call centre.

Another little niche professional living in an Executive flat recounted how he was retrenched a few years ago but found a job in a neighbouring country and now pays foreign provident fund and income tax. He said he just scraps by with a son in an independent school but feels embarrassed each time he is asked to

I realise that there are also other Singaporeans with similar stories, including those who have bought larger flats in better times, to heed the Government's call to let three generations live together. Some of these families are in employment but just getting by and because their elderly parents live with them in larger flats, their elderly parents would get less. In contrast, we all know of well-to-do Singaporeans who drive big flashy new cars like Mercedes Benzes but choose to live in 3-room flats. Now I think there is nothing wrong with that and, perhaps, it is their expression of prudence and humility despite their wealth. But when my residents know that these people will get a lot of SC&C rebates and so on while they will get far less, despite being in more difficult straits, I can sympathise with their feelings of frustrations and being hard done-by.

I would also like to highlight, like Ms Indranee, the plight of single parents and the difficulties they face with getting affordable public housing whenever the sale or disposal of the matrimonial home is dragged out or is in limbo, and where they do not have the means to afford open market housing options. Many who were previously considered well-to-do may now face severe hardship. Families in need also include those where ageing grandparents have to provide for dependent children and grandchildren in the case of single mothers, and where one parent is absent, due to abandonment or imprisonment. I wonder if future budgets could also include some provision for this group of the elderly because, perhaps, their needs are even greater than those of the elderly living alone.

Sir, as Singapore progresses and enjoys economic success, the living standards of our poor have been correspondingly elevated. We have to acknowledge that the face of the poor in Singapore has changed. It is not uncommon for the new poor, as it were, to possess refrigerators and televisions at home and almost 3.8 million people in Singapore have mobile phone subscriptions. While some have obviously been imprudent in their expenditure, others have merely been caught by the wave of globalisation and outsourcing. Families with middle class incomes also feel the pinch as their salaries stay static or get reduced while transportation, education and utilities go up. The Government's move to help pay for the education of children in this category is to be specially lauded as it signals that it recognises that even though some families are now earning $3,000-$4,000 a month, it can be difficult to provide all the best for our children. In fact, the Opportunity Fund which could be used for computers or school trips abroad is a fantastic idea. It shows how far we have come from the time when the first priority of the PAP Government was the provision of adequate primary and secondary school places for every child in Singapore. When my mother was a teacher in Paya Lebar in the 1970s, she told me she had students who had never been to downtown Singapore. By the time she became a relief teacher in her retirement, she recounted to me that her students in the same school were talking about their overseas holidays whenever school started. In contrast, I had met legislators from developed countries who had never been out of their country. When we talk about being a global city, we need to give our young people the chance to experience first-hand the world around them and also the wide world. I really think that these initiatives are the best things that has happened this year.

Sir, allow me to raise just two points. One may be an unintended consequence of the Progress Package in that some businessmen in small and medium enterprises, with workers and subcontractors in the informal sector, have expressed concerns that they may be held liable for inadvertent non-compliance with CPF, Medisave, income tax and workmen's compensation issues if the casual labour and small contractors were to claim an employer and employee relationship in order to claim eligibility for Workfare Bonuses. I hear that, in fact, a few have actively discouraged their workers from signing up for the Progress Package. Perhaps the Government could clarify this line.

Lastly, Sir, I think that our Government and our nation have made great progress and I note that many multi-nationals nowadays report their progress in their annual reports in terms of a triple bottomline. Besides reporting on their financial issues, they will also report on the progress, environmental and social issues. I believe, as a nation, we have done well in all these areas but, perhaps, not everyone is aware of the improvements made. Perhaps one day, when we report on the progress of Singapore in Parliament, we would consider this approach as well.

With that, Sir, I would like to express my deep support and appreciation for the 2006 Budget and financial policies.

our method to redistribute wealth, as it were, tends to lower the Gini coefficient and minimise discontent and envy among the poor. While other countries wax lyrical about human rights and helping the poor, Singapore, in its own quiet way, is walking the talk with affirmation, meritocracy and policies meant to reward talents and effort while not discounting the contribution of each of its nationals. Singapore's poor are, by contrast, very well provided for and may, in fact, be considered quite rich by international standards.donate to the school but can only afford a small sum. He, too, expressed the hope for more sympathetic treatment with respect to those who have heeded the Government's call to accept jobs overseas and yet still face problems at home.

Thank you, Mr Deputy Speaker, for allowing me to join in the debate.

I rise in support of the motion. The Budget this year tries and, I think, generally succeeds to be humane and progressive, to be both focused and holistic, far-seeing and far-reaching in both its concepts and its consequences. I would, therefore, just limit myself to one

Minister Mentor had a vision soon after Singapore's independence on a clean and green Singapore. This has turned out to be a blue-chip legacy for all of us. Every Singaporean has benefited from this vision and we still continue to benefit from it. But, as beneficiaries, should we just sit back and reap the dividends or should we value add? Obviously, the latter. I believe that in order for his vision of clean and green to stay relevant in today's and tomorrow's changing environment, R&D is an important aspect.

Sir, first of all, I should like to talk about the R&D in relation to climate change. Climate change was not an issue 40, 30 or even 10 years ago, otherwise, I am sure our past leaders would have addressed the issue. Now, today, no country can ignore this, not only because of the potentially devastating long-term effects but because of the rise in oil prices which is likely to continue. So climate change is something that has to be in every political agenda and in every energy policy of any country, whether it has or has not ratified the Kyoto Protocol.

One of the three key areas identified in the National Research Foundation is that of the environment and water. As a water-challenged country, we have done very well indeed in facing up to the problem and converting it to a growth industry that will benefit not just our economy or our environment but our national sustainability. I believe that we should do the same for energy. Singapore has no oil, gas; we do not even have coal, and, as I mentioned, oil prices are escalating. So energy efficiency, alternative fuels and clean development mechanisms must be one of our key target areas for R&D and the global market for this is enormous and will continue to grow. While we must do our

Perhaps we should look to nature for more ideas and inspiration. I had already mentioned, but I will bring it up again, that mangroves have been shown to be some of the best ways of preventing land erosion and silt. Perhaps we should get some inspiration from that as to how to protect our coastlines in the event of a rise in sea level and more rough seas even though we have been told we will be resistant to tsunamis. Of course, mangroves also act as a natural sequester for carbon dioxide.

The other area of R&D that I should like to address is that of our biomedical sciences. Our venture into this area five years ago, practically from scratch, has now grown into a S$10 billion industry and contributes 6% of our GDP. I think we have to congratulate the Government for this. But, at present, most, if not all, of this biomedical research is done in the laboratory.

area, the knowledge based economy and, in particular, the National Research Foundation.best to mitigate climate change, we also have to look into mitigating the possible effects of climate change such as greater and more frequent swings in climatic streams, rising sea levels, more potential outbreaks of disease as a result of these climatic disruptions. There has already been a theory that the rising dengue has been because of the increased rainfall we had last year. So will these areas be targeted in our R&D under the areas of environment and water?

And yet, if you ask any scientist or doctor, they will agree that mother nature is a better scientist and healer than man. As one would expect, she had a headstart of a few million years. So, I think that nature cannot only be studied in the laboratory. Biomedical sciences cannot only be studied in the laboratory. You have to go to the field. You have to look at ecosystems. You have to study direct from nature rather than remove her in isolated in vitro specimens.

The Minister for Trade and Industry has emphasised the importance of